UAE Government Introduces Fines of Up to Dh1 Million for Employment Law Violations

The UAE government has introduced some important changes in its labor laws, which are seen to further empower workers and ensure that the labor market becomes fair and competitive. Some of these amendments include the imposition of fines ranging from Dh100,000 to Dh1 million on employers who are found to be in violation of provisions of the Federal Decree-Law on the Regulation of Employment Relationships. The proposed fines clearly show the government’s efforts in terms of labor rights protection and the promotion of legal practices for employment.

What are the New Penalties?

Under the amended law, every violation on the part of employers can attract tough penalties. These include:

1. Hiring Workers without Proper Permits: Any employer who engages workers without obtaining the proper work permit or brings workers into the UAE without providing them with a job commits an offense for which a hefty fine shall be imposed. This provision is crafted to end illegal employment and ensure all workers are documented legally.
2. Closure of Business without Settling Workers’ Entitlements: Any employer who closes their business without fully settling the rights of their workers, particularly entitlements to wages and end-of-service benefits, shall be severely penalized. This move will ensure the protection of workers from being left unpaid in case employers close businesses suddenly.
3. Engagement in Fraudulent Employment: An employer who is found practicing fraudulent labor employment, including fictitious employment and fraudulent Emiratization, shall be punished by a fine. Fictitious Emiratization involves a scenario where a UAE national is formally employed for the purpose of observing Emiratization quotas but is, in reality, given no form of job.
4. Illegal Employment of Minors: Any employer who employs minors contrary to UAE labor laws will be liable to heavy fines. The UAE has strict laws concerning the employment of minors; this provision enforces them conclusively.
5. Circumvention of Labour Market Regulations: Any action aimed at circumventing the Acts and Regulations governing the labor market, including through fictitious employment, shall attract very serious penalties. The need here is to guard against exploitation and ensure compliance with legal standards.

Penalties Increase with the Number of Violations

One of the salient features of these new provisions is that fines will increase and multiply based on the number of employees involved in the violation. An employer found to have indulged in fictitious employment with respect to more than one worker shall have the fines multiplied accordingly. This escalation would certainly act as a necessary deterrent to prevent large-scale violations.

Settlement Options for Employers

The amended law also authorizes the Ministry of Human Resources and Emiratization (MOHRE) to settle violations under specific conditions. It is now possible to settle a violation if the employer agrees to pay 50% of the minimum fine and refunds to the government the financial incentives obtained from fictitious employment. Therefore, this provision gives the employer an opportunity to reduce the financial impact resulting from their action and, at the same time, return what has been gained from an illegal act.

Procedure for Initiating Criminal Proceedings

The law has introduced a new requirement that criminal proceedings in crimes relating to fictitious employment, including fraudulent Emiratization, be initiated only at the request of the Minister of Human Resources and Emiratization (MOHRE) or his duly authorized representative. Such an approach centralizes these cases and helps to deal with them at an enhanced level of seriousness and degree of legal control.

Changes in Handling Employment Disputes

The new provisions also affect how the resolution of employment disputes takes place. In case of a dispute with any decision by MOHRE, it will now be referred to the Court of First Instance and not to the Court of Appeal. This modification shall speed up the resolution process and ensure that disputes are attended to efficiently and impartially. This new rule is applicable in all cases except for those disputes whose decision has been adjusted or reserved for the purpose of issuing a judgment.

Furthermore, all current disputes, applications, and claims arising from employment relations will be transferred to the Court of First Instance by the Court of Appeal. This new procedure is set to fast-forward the pace of law and hence provide a more direct way for the resolution of employment disputes.

Time Limit for Filing Claims

The revised law clearly lays down a time limit within which claims arising from employment disputes have to be filed. Any employee has a time span of two years from the date of termination of their employment relationship to file a claim. In case of filing after this period, the court will not proceed with the case. Thus, this clause ensures that there is no undue delay in addressing a rightful claim and that the dispute is resolved in time.

Why These Changes Matter

These amendments in the UAE labor laws underline the government’s current efforts toward a more stringent legal regime for employment relations. The government aims to protect workers from any violation of their rights and to ensure that justice is done, with fair employment practices guarded and integrity maintained in the labor market. These measures contribute to the UAE’s reputation as a country that upholds justice and the rule of law.

How HHS Dubai Lawyers Can Help

With these new changes, the labor laws of the UAE can be very complicated to understand and navigate. Whether you are an employer or an employee, the expert employment lawyers at HHS Lawyers have got your back. We offer legal advice on employment law, dispute resolution, and assurance of full compliance with the laws. Feel free to contact us today for more information on how HHS Lawyers in Dubai can further assist with employment law matters.