New UAE Labour Law Amendment: What Federal Decree Law No.9 of 2024 Means for Employers and Job Seekers
The United Arab Emirates has introduced significant amendments to its labour laws with the enactment of Federal Decree Law No.9 of 2024. These changes aim to enhance transparency, fairness, and efficiency in the labour market. Focusing on improving dispute resolution processes, increasing penalties for illegal recruitment practices, and extending protections for both expatriate and Emirati workers, this new legislation is set to reshape the employment landscape in the UAE.
In this article, we look at the key aspects of the new law and its amendments to Federal Decree-Law No. (33) of 2021 Concerning Labour Relations (i.e. The UAE Labour Law) exploring its implications for employers and job seekers using DubaiHires.com.
Key Amendments in Federal Decree Law No.9 of 2024
Increased Penalties for Illegal Recruitment Practices
One of the most notable changes is the substantial increase in penalties for employing workers without valid permits or engaging in fictitious recruitment practices. According to the new version of Article 60 of the amended law:
“Individuals who commit the following violations shall be fined a minimum of AED 100,000 and a maximum of AED 1,000,000:
a) Employment of a worker without obtaining a work permit
b) Hiring a worker and leaving him/her unemployed
c) Utilizing work permits for purposes other than those intended.”
This marks a significant increase from previous fines, which ranged from AED 50,000 to AED 200,000. The crackdown on illegal recruitment aims to curb fraudulent practices and protect the rights of workers.
Crackdown on Fictitious Emiratisation
The new decree targets the issue of ‘fictitious Emiratisation,’ where companies falsely report the employment of Emirati nationals to meet government quotas. Article 60(2) states:
“Employers who commit violations… and appoint an employee or employees in fictitious circumstances will be fined not less than AED 100,000 and not more than AED 1,000,000… The penalty is multiplied by the number of fictitious employees appointed.”
This move underscores the government’s commitment to genuine workforce nationalization efforts, ensuring that Emirati citizens have real employment opportunities.
Streamlining Dispute Resolution Processes
Federal Decree Law No.9 introduces significant changes to the labour dispute resolution process. Article 54 outlines the updated procedures:
“In the event of a dispute between the Employer and the Employee… the dispute shall be submitted to the Ministry for resolution… The Ministry shall have jurisdiction to resolve the dispute by a decision in all cases involving disputes whose value does not exceed AED 50,000…”
Additionally, the appeals process has been modified to expedite resolutions:
“Appeals must be made to the Court of First Instance, and once that court issues a ruling, the decision is final, with no further opportunities for appeal.”
These changes aim to provide faster and more efficient resolutions to employment disputes, reducing the burden on the judicial system.
Extension of Time Limit for Filing Claims
The new law extends the time limit for employees to file claims related to unpaid wages or other employment rights violations. Article 54(9) states:
“Litigation concerning any of the rights accrued under this Decree-Law may not be considered after two years from the date of termination of employment.”
Previously, the statute of limitations was one year, giving workers more time to seek legal recourse.
Impact on Employers
Compliance Requirements and Risks
Employers must now exercise greater diligence in adhering to labour laws to avoid severe penalties. Key actions include:
- Ensuring Valid Work Permits: All employees must have up-to-date and appropriate work permits.
- Accurate Employment Records: Maintain thorough documentation to prove compliance with all legal requirements.
- Avoiding Fictitious Practices: Genuine employment of Emirati nationals is mandatory; any form of misrepresentation can lead to multiplied fines.
Failure to comply not only results in substantial financial penalties but also risks reputational damage and potential legal action.
Impact on Job Seekers and Workers
Enhanced Protections for Expatriate Workers
The amendments offer greater protection to expatriate workers by:
- Cracking Down on Illegal Recruitment: Ensuring workers are employed under lawful and transparent conditions.
- Extending Claim Periods: Providing more time to address grievances related to employment rights violations.
These measures enhance the UAE’s appeal as a destination for skilled expatriates, assuring them of stronger legal safeguards.
Opportunities for Emirati Workers
By penalizing fictitious Emiratisation practices, the law promotes genuine employment opportunities for Emirati citizens. Employers are incentivized to:
- Invest in Emirati Talent Development: Creating sustainable job prospects for the local workforce.
- Comply with National Workforce Policies: Aligning with the country’s broader economic goals.
Opportunities and Challenges
For Businesses
While the new law presents compliance challenges, it also offers opportunities to:
- Modernize HR Practices: Streamline recruitment and employment procedures.
- Promote Fair Work Environments: Foster transparency and equity in the workplace.
- Attract Top Talent: Demonstrate commitment to legal and ethical standards, making the company more appealing to potential employees.
For Employees
Workers stand to benefit from:
- Faster Dispute Resolutions: More efficient processes reduce the time and stress associated with legal battles.
- Greater Job Security: Enhanced protections against exploitative practices.
- Extended Time for Legal Recourse: More time to understand and act upon their rights.
Conclusion
Federal Decree Law No.9 of 2024 represents a significant step in modernizing the UAE’s labour laws. By imposing stricter penalties for illegal recruitment, improving dispute resolution processes, and extending worker protections, the UAE reinforces its commitment to a fair and efficient labour market.
For employers, it’s imperative to understand and comply with the new regulations to avoid severe penalties and contribute to a transparent employment landscape.
For job seekers and workers, the amendments offer enhanced protections and more robust mechanisms to safeguard their rights.
You can view the current version of the UAE Labour Law with its new amendments here.
At DubaiHires.com, we are committed to keeping you informed about the latest developments in the UAE job market. Whether you’re an employer aiming for compliance or a job seeker looking for opportunities, our platform aligns with the newest labour laws to help you navigate the evolving landscape effectively.
Stay informed, stay compliant, and make the most of the opportunities presented by these significant legal developments.
