The UAE Government has recently introduced fines ranging up to Dh1 million as part of the Federal Decree-Law on the Regulation of Employment Relationships. The fines, ranging from Dh100,000 to Dh1 million, are for violations such as employing a worker without a work permit, closing a business without settling the rights of workers, engaging in fraudulent labor acts, employing minors illegally, and engaging in any form of circumvention of labor market laws or regulations. The penalties will escalate based on the number of workers fictitiously employed, and the Ministry of Human Resources and Emiratisation can offer settlements if the employer pays 50% of the minimum fine and returns any financial gains acquired through fake employees.
The decree also states that criminal proceedings for fictitious employment, including fake Emiratisation, can only be initiated upon the request of the Minister of Human Resources and Emiratisation. Disputes between employers and employees must be referred to the Court of First Instance if there is a disagreement with the Ministry’s decision, except for cases that have been adjusted or reserved for judgment. The Court of Appeal is required to refer all employment-related requests, disputes, and grievances to the Court of First Instance starting from the date of the decree’s implementation. Claims filed after two years from the termination of the employment relationship will be revoked by the court as per the new provisions.
This decree is an essential part of the country’s efforts to enhance its legislative and legal framework, aiming to boost the efficiency and competitiveness of the labor market. The regulation of employment relationships is crucial to clearly define the rights and obligations of all parties involved and ensure their protection by law. It signifies a step towards ensuring fairness and compliance within the labor market, creating a more structured and regulated system that benefits both employers and employees alike.
The UAE Government’s initiative to introduce these fines reflects its commitment to upholding labor laws and regulations, promoting fair and ethical practices within the labor market, and safeguarding the rights of both employers and employees. By enforcing strict penalties for violations such as fake employment, the Government aims to deter fraudulent activities and ensure that all employment practices adhere to the legal standards set forth in the Federal Decree-Law. This move is a proactive measure to maintain a transparent and compliant labor market environment that fosters trust and accountability among all stakeholders involved.
Employers in the UAE are advised to adhere to the regulations outlined in the Federal Decree-Law on the Regulation of Employment Relationships to avoid facing hefty fines and penalties. By ensuring compliance with work permit requirements, respecting the rights of workers, and refraining from engaging in fraudulent labor practices, employers can uphold ethical standards and contribute to a fair and thriving labor market environment. The implementation of these fines highlights the UAE Government’s commitment to fostering a culture of accountability and transparency within the labor market, ultimately benefiting both businesses and employees in the long run.
