On the 29th of July 2024, Federal Decree-Law No. 9/2024 was passed, an amendment to certain provisions of the Federal Decree-Law No. 33/2021 relating to the regulation of labour relations. The amendment seeks to foster more efficiency and flexibility in the market in the United Arab Emirates (UAE) and at the same time aimed at promoting the rights of employers and employees in the country. This article gives an overview of changes made under the law and how those changes affect Employers and Employees in the UAE.
Individual Labour Disputes
Among the most remarkable amendments provided by Federal Decree-Law No. 9/2024, one can identify those concerning individual labour disputes. In line with the new provisions, where an employer, worker, or any beneficiary denies any right arising from either of them under the provisions of this Decree-Law, he or she shall make a formal application in writing to the Ministry. The Ministry will consider the request and all the appropriate actions will be taken to resolve the matter between them.
In any case, where the value of the claim subject matter of the dispute does not exceed AED 50,000, or where the dispute arises from non-compliance of any of the parties with the amicable settlement decision given by the Ministry, the Ministry shall decide the matter. The decision of the Ministry referring to the dispute shall be executable and the writing that formulates the decision shall be stamped with the executory formula. The law provides that any of the parties in the dispute can institute legal proceedings before the appropriate Court of Appeal on the matters in question within fifteen working days from the date of notification of the decision. The judgement sought in the Court of First Instance shall be conclusive and the filing of the lawsuit shall cause the temporary suspension of the enforcement of the decision of the Ministry.
Penalties
Federal Decree-Law No. 9/2024 also has amendments concerning penalties. Pursuant to the new provisions, any person who commits the following shall be punished by a fine of not less than AED 100,000 and not more than AED 1,000,000:
Table 1: Comparison of penalties under Article 60 before and after the amendment
| Violation | Penalty before amendment (Article 60) | Penalty after amendment (Article 60) |
|---|---|---|
| Employing a worker who is not permitted to work for him | Fine of not less than AED 50,000 and not more than AED 200,000 | Fine of not less than AED 100,000 and not more than AED 1,000,000 |
| Recruiting or employing a worker and leaving him without work | Fine of not less than AED 50,000 and not more than AED 200,000 | Fine of not less than AED 100,000 and not more than AED 1,000,000 |
| Using work permits for purposes other than those for which they were issued | Fine of not less than AED 50,000 and not more than AED 200,000 | Fine of not less than AED 100,000 and not more than AED 1,000,000 |
| Closing an establishment or suspending its activity without taking actions for settling the workers’ rights | Fine of not less than AED 50,000 and not more than AED 200,000 | Fine of not less than AED 100,000 and not more than AED 1,000,000 |
| Employing a juvenile in violation of the provisions hereof | A fine of not less than AED 50,000 and not more than AED 200,000 | Fine of not less than AED 100,000 and not more than AED 1,000,000 |
| Agreeing on employment of the juvenile in violation of the provisions hereof, by the guardian or custodian of the juvenile | A fine of not less than AED 50,000 and not more than AED 200,000 | A fine of not less than AED 100,000 and not more than AED 1,000,000 |
| Circumventing the provisions of the laws, regulations or decisions regulating the labour market and appointing one or more workers in a fictitious manner | Not applicable | A fine of not less than AED 100,000 and not more than AED 1,000,000 |
Any employer who transgresses the labour market regulations in terms of recruiting workers in a deceptive way will be penalized a fine between one hundred thousand and one million Emerati Dirham. If the worker gains any advantages or benefits from a government entity because of this violation, the employer will be compelled to make the employer get back the value of the incentive received from the particular government entity to the extent of the violation committed by an employer. The penalty will be multiplied by the number of workers who have been appointed in a fictitious manner. A criminal case can only be started for this crime with the consent of the Minister and/or his deputy. The Ministry may also dismiss the case before passing a ruling whereby the employer must pay at least 50% of the minimum fine and repay all the financial incentives received by the workers. The criminal case will be dismissed if the settlement amount has been paid.
FAQs
Question: What is the purpose of Federal Decree-Law No. 9/2024?
Answer: Federal Decree-Law No. 9/2024 was enacted to amend a few provisions of Federal Decree-Law Number 33/2021, which regulates the labour relations in UAE.
Question: What are the key amendments introduced by Federal Decree-Law No. 9/2024?
Answer: The modifications introduced by the Federal Decree-Law No. 9/2024 concern the amendments to Article 54 stating the rules of individual labour disputes and Article 60 concerning penalties for violation of some provisions of the Decree-Law.
Question: What are the penalties for violating the provisions of Federal Decree-Law No. 9/2024?
Answer: Some of the offences and penalties for breaching the provisions of Federal Decree-Law No. 9/2024 are as follows; the fines shall not be less than one hundred thousand (AED 100,000) and shall not exceed one million (AED 1,000,000) for certain violations.
Conclusion
Labour Relations in UAE have recently undergone changes by virtue of Federal Decree-Law No. 9/2024. The changes concerning individual labour disputes have contributed to the formulation of simpler procedures for the resolution of disputes while those concerning penalties have contributed to the formulation of higher fines for the violation of provisions of the law. It is advised to seek the services of professional tax consultants in UAE in order to be informed of the changes that have been made regarding the regulation of labour relations to avoid cases of penalties.
