United Arab Emirates: Labour Law updates

10 Sept 2024    2 minute read
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In brief

In August 2024, we have seen the government introduce some updates to the UAE Labour Law. These developments are primarily aimed at cracking down on unscrupulous employers by increasing the penalties that may be imposed on a range of violations.

Contents

Who is the change relevant to?

The new amendments to the UAE Labour Law are relevant to all private companies in the UAE, excluding those based in the Dubai International Financial Centre (DIFC) and the Abu Dhabi Global Market (ADGM).

What do you need to know?

  • Limitation or "time bar" period increased
    • Employees now have two years (increased from one year) to raise any employment-related claims from the end of the employment relationship.
  • Additional penalties introduced
    • The new amendments outline that any employer who:
      • Employs an employee to work without the required authorisations in place;
      • Recruits or employs an employee but does not provide them with work;
      • Uses work permits for purposes other than what they were designated for;
      • Closes a business (or suspends its operations) without settling the financial entitlements of the workforce in accordance with legal requirements; and
      • Employs a minor in violation of the law

will face fines of between AED 100,000 to AED 1 million. 

  • In addition, penalties of between AED 100,000 to AED 1 million may be imposed on any employer who engages in fictitious recruitment practices or false Emiratisation practice. This would include, for example, employing a UAE national but not providing them with any work. The fine is multiplied by the number of employees employed or recruited in a fictitious manner. Further, in the event that the employee was provided with any payment from the government during their "fictitious" employment, the employer will be required to repay these sums (and is prohibited from reclaiming the amount from the employee).

It is notable that the regulations are drafted broadly and could encompass a range of conduct.

To speak to us in relation to the UAE Labour Law amendments or any employment law-related matters, please reach out to a member of the Baker McKenzie Middle East Employment team.

* Sami Nasr, Paralegal at Dubai offices, contributed to this alert.

Contact Information
Joanna Matthews-Taylor
Partner
Dubai
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joanna.matthews-taylor@bakermckenzie.com
Christiana O'Connell-Schizas
Counsel
Riyadh
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christiana.o'connell-schizas@bakermckenzie.com
Aqsa Khan-Sadiq
Associate
Dubai
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aqsa.khan-sadiq@bakermckenzie.com
Mark Tedeschi
Associate
Dubai
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mark.tedeschi@bakermckenzie.com

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