The UAE Government has introduced significant amendments to the country’s labour law, aiming to enhance market competitiveness and clarify the rights and responsibilities of employers and employees.
Under the newly issued federal-decree law, employers could face fines ranging from AED 100,000 to AED 1 million for violations, including hiring workers without proper permits, failing to provide jobs to workers brought into the country, and misusing employment permits. Businesses that shut down or suspend operations without addressing worker rights also fall under these penalties.
The same fines apply to the illegal employment of minors. Additionally, the law introduces criminal penalties for fictitious recruitment practices, including fraudulent Emiratisation, with fines escalating based on the number of fake employees involved.
In labour disputes, appeals against decisions from the Ministry of Human Resources and Emiratisation will now go to the Court of First Instance instead of the Court of Appeal, with claims needing to be filed within two years of the employment relationship ending.
The decree also allows the Ministry to resolve cases before a court ruling if the employer pays at least 50% of the minimum fine and reimburses any financial incentives received by fictitious employees. Criminal proceedings for fraudulent recruitment can only be initiated at the request of the Minister of Human Resources and Emiratisation or their representative.
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