New amendments to labour law, part of Federal Decree-Law No. 9 of 2024, comes into effect from August 31

The UAE has introduced amendments to its labour law, effective from August 31, aimed at strengthening labour regulations and protecting the rights of workers.

The new amendments are part of Federal Decree-Law No. 9 of 2024, issued on July 29, and which comes into effect from August 31, 2024.

1. Statute of limitations for labour claims extended to two years

Significant amendments have been made to Article 54 of the UAE Federal Decree-Law No. 33 of 2021 on the Regulation of Labour Relations (the UAE Labour Law) by Article 1 of Federal Decree-Law No. 20 of 2023 and Article 1 of the new Federal Decree-Law No. 9 of 2024.

One of these modifications is the extension of the statute of limitations in labour cases. The UAE Labour Law has modified the statute of limitations for claiming labour rights. Previously, it was one year from the day of entitlement, but now it is two years from the date of work relationship termination.

In order to offer parties more time to evaluate their circumstances and submit a claim, Article 54(9) of the Labour Law now allows either the employer or the employee to bring a claim under the Labour Law up to two years from the date on which the working relationship ended.

2. No appeal for cases under Dh50,000, file a case with Court of First Instance, instead

The Ministry of Human Resources and Emiratization (MOHRE) has begun managing labour matters involving claims up to Dh50,000 since January 1, 2024. 

The Labour Law's Article 54(2) affirms that MOHRE retains the authority to hear, rule on, and make judgements regarding any claims under Dh50,000. These rulings are instantly enforceable. 

However, as on August 31, the procedure for appealing its judgement will be altered from what it was previously.

It is now necessary to file lawsuits challenging the Ministry's decision with the Court of First Instance rather than the Court of Appeal. Under the former law, Federal law-Law No. 20/2023, Article 1, the Ministry's judgement could be appealed to the Court of Appeal within a period of fifteen working days. The new regulation, however, modifies Article 54 to let any party to the disagreement to immediately file a lawsuit in the Court of First Instance challenging the Ministry's decision. This is a big change as the Court of First Instance's ruling is final and a new legal procedure is introduced in place of an appeal.

Within three working days of the appeal's filing date, the Court of First Instance will hold a hearing and render a decision within thirty working days. After this ruling is made, there will be no further appeals allowed.

New process for labour claims of Dh50,000 or less

• MOHRE issues decision.

• Any challenge must be filed with the Court of First Instance within 15 days of the judgement notification.

• Court of First Instance will set a hearing within three working days.

• Judgement to be issued within 30 working days from the date the appeal was filed.

• The judgement issued by the Court of First Instance is final.

3. Increased fines for labour violations

More severe penalties for breaking employment laws have also been included under the new law. The prior legislation-imposed fines ranging from Dh50,000 to Dh200,000 for infractions such hiring people without permission, exploiting work permits for unapproved activities, and shutting down businesses without resolving employee rights. The new rule imposes fines for various infractions ranging from Dh100,000 to Dh1 million.

Additionally, the amended decree adds a new clause to Article 60(2) that penalises businesses that fraudulently engage one or more workers and violate labour laws, rules, or judgements by paying a fine ranging from Dh100,000 to Dh1,000,000.

Violations that have a stricter penalty:

Employers who violated the former Article 60 of the UAE Labour Law faced fines of DhD50,000 to Dh200,000 for the following offences: 

• Hiring an employee without a valid work visa. 

• Hiring someone and then not providing them with employment. 

• Making use of work permits for objectives unrelated to those for which they were issued. 

• Closing a business or stopping operations without following the proper processes to resolve employee rights, in contravention of the UAE Labour Law's requirements, implementing rules, and implementing judgement.

• Hiring a minor in violation of UAE labour regulations. 

• Consenting to hire a minor who is under the care or custody of another person in contravention of this UAE labour law. 

These fines have been greatly enhanced by the new regulation, and now range from Dh100,000 to Dh1 million.