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On 31 July 2024, under Federal Decree Law No. 9 of 2024, the UAE legislator replaced Articles 54 and 60 of Federal Decree Law No. 33 of 2021 regulating Labour Relations (the “Labour Law”) with new provisions. These amendments reflect significant enhancements in the dispute resolution process for small employment disputes, marking a shift in the legal framework with a stronger emphasis on deterring employers from violating the Labour Law and protecting the rights of the more vulnerable party, being the employee.

The newly introduced Article 54 reinforces the authority previously granted to the Ministry of Human Resources and Emiratisation (“MOHRE” or the “Ministry”) to act as an intermediary in labour disputes, to examine disputes arising from employment relationships and take necessary actions to resolve them amicably, thus, underscoring its role as a proactive mediator prioritising fairness and efficiency. 

A particularly noteworthy provision is the Ministry’s authority to unilaterally settle disputes through a final and enforceable decision when the claim’s value does not exceed AED 50,000. This allows for faster resolution of low-value claims, significantly reducing the burden on the courts and providing a quicker path to justice. Additionally, the Ministry is empowered to resolve disputes related to non-compliance with amicable settlement decisions previously agreed upon by both parties before the Ministry, regardless of the claim’s value.

The previous text of Article 54 granted the dissatisfied party the right to escalate its grievance by filing a claim before the Court of Appeal within fifteen (15) business days from the date of notification of the Ministry’s decision. Under the new amendment, a party dissatisfied with the Ministry’s decision must now file its claim before the Court of First Instance within fifteen (15) business days from the date of notification, with the court’s judgment being final and not subject to further appeals. To facilitate this transition, the new amendment directs the Court of Appeal to refer all ongoing employment disputes concerning objections to Ministry decisions to the Court of First Instance, except those concluded by a final judgment or reserved for judgment.

The Court of First Instance is also mandated by the new amendment to adjudicate employment disputes within thirty (30) business days from the date of filing, whereas the previous Article 54 limited the adjudication period for claims concerning disputed Ministry decisions to fifteen (15) business days. This defined timeline is designed to prevent delays in resolving small employment disputes and provide both parties with a more efficient legal process.

Although the Ministry’s decisions in small employment claims carried the weight of a writ of execution, the new amendment to Article 54 reinforces the need to suspend enforcement of the Ministry’s disputed decision once a claim is filed by either party before a court of law.
Similar to the previous provisions of Article 54, the amended text offers protection to employees during the dispute resolution process. The Ministry is authorized to instruct employers to continue paying wages for up to two (2) months if the dispute has led to the suspension of the employee’s wages, crucially safeguarding employees’ financial stability while their cases are examined by the Ministry.

Another key change in the amended Article 54 is the time-bar associated with employment disputes. Previously, the time-bar for hearing any legal action concerning employment rights was one (1) year from the date of entitlement of the employment dues. The new text extends the time-bar to two (2) years from the date of termination of the employment relationship. This extension grants employees a longer duration to bring forth their claims to the judicial system, providing additional protection to them. The challenge now lies in addressing employment claims previously adjudicated as inadmissible due to the one (1) year time-bar, which could potentially be challenged under the newly extended two (2) year time-bar.

Federal Decree-Law No. 9 of 2024 also amended Article 60 of the Labour Law. Previously, Article 60 criminalised certain violations by employers, imposing penalties ranging between AED 50,000 and AED 200,000 for violations such as:

1. Employing a worker who does not have the proper authorisation or licensing to work for them.
2. Recruiting or employing a worker and then leaving them without work.
3. Misusing work permits for purposes other than those for which they were issued.
4. Closing an establishment or suspending its activities without settling workers’ rights or entitlements.
5. Employing a minor in violation of the Labour Law’s provisions.
6. Agreeing to employ a minor in violation of the Labour Law, where the person responsible has tutorship or guardianship over the minor.

These provisions made it clear that the Labour Law views the employee as the more vulnerable party in the employment relationship, necessitating stringent measures to protect workers, particularly those in vulnerable groups such as minors or employees left without work or unpaid upon the closure of their employer. The penalties under the original Article 60 were intended to deter these violations, but they were significantly less severe than the penalties introduced in the new amendment.

The new amendment to Article 60 introduces much heftier penalties for labour law violations, with fines now ranging from AED 100,000 to AED 1,000,000, depending on the severity and nature of the violation. Moreover, the amendment introduces new provisions specifically targeting fictitious employment practices, imposing similarly severe fines of AED 100,000 to AED 1,000,000 for such offenses. The amendment also includes a clause that multiplies the penalty based on the number of workers involved in fictitious employment, directly addressing and aiming to curb the practice of falsely employing individuals to claim benefits or evade legal obligations.

Additionally, the amendment to the Labour Law grants the Ministry the authority to settle disputes related to fictitious employment, provided that the employer pays at least 50% of the minimum fine imposed. Furthermore, the employer is required to reimburse the government for any financial incentives improperly obtained through fictitious employment. This measure strengthens the Ministry’s ability to enforce compliance and ensures that benefits gained through fraudulent employment practices are fully recovered, protecting the integrity of government programs, such as the Emiratisation program and further dissuading employers from engaging in such practices.

These amendments mean that employers must exercise greater caution and ensure full compliance with the Labour Law. The possibility of severe penalties and potential for criminal action serve as strong deterrents against non-compliance and creates a stronger incentive for companies to adhere to legal standards, thereby reducing instances of rights violations. For employees, these amendments offer greater security and assurance that their rights will be protected. 

In conclusion, the amendments to the UAE Labour Law represent a crucial step toward ensuring a more equitable and just workplace environment while safeguarding workers’ rights. This shift not only aligns with international labour standards but also reflects the UAE’s ongoing efforts to create a more transparent and accountable labour market.