Significant Amendments to UAE Labour Law: Federal Decree-Law No. 9 of 2024

The UAE government has introduced pivotal amendments to its labour law through Federal Decree-Law No. 9 of 2024 (the “Decree”), effective from 31 August 2024. These amendments represent a significant enhancement to the protection of employees’ rights, while also imposing stricter penalties on employers for violations.

Overview of the Amendments

1. Extended Statute of Limitations
   One of the most important amendments to the law is the increase in the limitation period for an employer or employee to bring an employment claim. Both employers and employees now have two years from the date of employment termination to file a labour claim, an increase from one year from the date of entitlement to claim.
2. Increased Penalties for Employer Violations
   The Decree has substantially increased penalties for employer violations, now ranging from AED 100,000 to AED 1,000,000, compared to the previous range of AED 50,000 to AED 200,000, depending on the specific violation.
3. Wages During Disputes
   In cases where an employee’s wages have been suspended due to a dispute, the Ministry of Human Resources and Emiratisation (MOHRE) may now instruct employers to continue wage payments for up to two months during the dispute process. This measure is designed to ensure that employees do not face undue financial hardship while their claims are being resolved.
4. Legally Enforceable Decisions by MOHRE
   MOHRE’s role in resolving labour disputes has been strengthened, with its decisions now carrying the power of a writ of execution. This means that MOHRE’s rulings can be enforced in the same manner as court orders, providing a more efficient and cost-effective means of resolving disputes. However, it is important to note that this enforceability applies only to cases with a value less than AED 50,000. For disputes exceeding this amount, the usual legal processes will continue to apply.
5. Changes to Dispute Resolution
   A procedural change introduced by the Decree concerns the resolution of labour disputes. In the event of a disagreement with a decision issued by MOHRE, the case must now be brought before the Court of First Instance rather than the Court of Appeal. All pending disputes or grievances that were before the Court of Appeal as of the effective date of the Decree will be transferred to the competent Court of First Instance, except for those already reserved for judgment.
6. Implications for Employers
   For employers, these amendments signal a more stringent regulatory environment, demanding greater compliance with UAE Labour Law. The substantial increase in fines and the introduction of new provisions related to fictitious employment practices highlight the importance of adhering to legal requirements and maintaining transparent, fair employment practices.

Employers should take proactive steps to review their current practices and ensure full compliance with the new regulations. This includes updating employment contracts, ensuring proper documentation and authorization for all employees, and reviewing internal policies and procedures to prevent violations of UAE Labour Law.

For any queries related to these amendments or for guidance on navigating these changes please contact us at Ibrahim Al Banna Advocates to ensure your practices align with the updated law.