The UAE government has issued a Federal-Decree Law amending key provisions of the Federal-Decree Law regarding the Regulation of Employment Relationship also known as the UAE ‘Labour Law’ and raising the penalties for employment violations. new amendments are aimed to further develop UAE’s legislative and legal framework. Ensuring efficiency and competitiveness of the labor market, regulating employment relationships, and clearly defining the rights and obligations of all the parties involved, stay protected by law.
The penalties begin from AED 100,000 up to AED 1 million. Penalties to be paid will multiply based on the number of workers involved in fictitious employment.
The decree also grants the Ministry the authority to settle these cases at the employer’s request before a court ruling is issued, as long as the employer pays at least 50 percent of the minimum specified fine and repays the government for all financial incentives received by their fictitious employees.
Violations include:
- Employing a worker without a work permit or bringing them without providing any job.
- Closing a business without settling the rights of the workers.
- Taking part in fraudulent labor acts including fraudulent employment or fictitious Emiratisation which can lead to Criminal Penalties
- Employing a minor in violation of the law
- Engaging in any act of circumvention of the laws or regulations governing the labour market, including fictitious employment.
Moreover, the amendments stipulate that in the event of labor disputes, if there is disagreement with a decision by the Ministry of Human Resources and Emiratisation (MOHRE), the case should be taken to the Court of First Instance instead of the Court of Appeal. Additionally, the court must reject any claims filed more than two years after the termination of the employment relationship, as per the current law.
How BAM Can Assist Your Company
- BAM can help Companies in onboarding their new employees by assisting them in work permit and visa processing from the authorities as per the prescribed process defined in Law.
- BAM can support the companies in drafting the Employment Contract in line with the UAE Employment Laws and Regulations.
- BAM can support the Companies in drafting the Employee Handbook or HR Policy based on Company Policy if any, UAE Employment Law and HR best practice in the region.
- BAM can assist the Companies in processing the payroll as per Wages Protection System (WPS) and ensure full compliance with UAE labour law and General Pension & Social Security Authority (GPSSA)
- BAM can guide the Companies in getting the Medical Insurance and Involuntary Loss of Employment (ILOE) insurance for the employees.
