New UAE labor law: Fine of up to Dh1m for violating conditions – News
Contract changes only if they benefit workers.
Question: My question relates to the new labor law that will come into effect on February 2nd. Do any changes apply to our existing contracts? Also, what should employees do if the company does not comply with the regulations? What is the penalty for companies that break these rules and how does the Department enforce it?
Answer: Federal Law No. 8 of 1980 Regulating Labor Relations in the UAE (the “Federal Law No. 8 of 1980”) and the provisions of Federal Law No. 33 of 2021 Regulating Labor Relations are repealed (the “New Employment Law”) apply from 2 February 2022 in relation to employment matters in the UAE.
It should be noted that the existing employment contracts, which are subject to the provisions of Federal Law No. 8 of 1980, may also be applicable after the new Labor Code has come into force. However, the employer can change the contract to adapt it to the new regulations. However, the changes may only contain regulations that are more advantageous for the employees.
This is in line with Article 65 (5) of the new Labor Code, which states: “The employer shall not review the terms of the valid employment contract concluded with the employee prior to the promulgation of this Legislative Decree, with intent to apply the provisions of this Law, it unless such changes serve the well-being and benefit of the employee. The employment contract may be updated upon expiry in accordance with the provisions of this Legislative Decree.”
In addition, employers may have to convert the permanent contracts into fixed-term contracts within a year of the entry into force of the new Labor Code. This corresponds to Article 68 of the new Employment Act, which states: “1. The provisions of this Legislative Decree apply to permanent employment contracts concluded in accordance with the aforementioned Federal Law No. 8 of 1980.
“2. Employers must, within one year from the effective date of this Legislative Decree, adjust their respective positions and convert permanent employment contracts into fixed-term employment contracts in accordance with the conditions, controls and procedures set forth herein. This period can be extended by other periods by the Minister if this is necessary in the public interest.
“3. Subject to paragraph (2) above, the employer may calculate the severance pay in accordance with the provisions of the permanent employment contract pursuant to the aforesaid Federal Law No. 8 of 1980.”
The employer and the employee may terminate the permanent employment contract signed before the entry into force of the new Labor Code, subject to the notice period specified in Article 65 (6) of the new Labor Code.
Articles 58 to 64 of the new Labor Code set out the penalties to be borne by both the employer and the employee for breaching the provisions of the new Code. Employers may face penalties ranging from Dh50,000 to Dh200,000 for violations of Article 60 of the new Labor Code. Violations include matters related to employing a person without a work permit, abuse of work permits, closing the business without payment of termination benefits, hiring an employee and not assigning him work.
Furthermore, Article 63 of the new Labor Code states: “Anyone who violates any of the provisions of this Legislative Decree and its implementing regulations and implementing decisions shall be fined not less than Dh5,000 and not more than Dh1 million. ”
If the employer does not comply with the provisions of the new labor law, the employee can file a complaint with the Ministry of Human Resources and Emirates or the relevant free zone authority.
Ashish Mehta is the Founder and Managing Partner of Ashish Mehta & Associates. He is admitted to practice law in Dubai, UK and India. Full details of his company at: www.amalawyers.com. Readers can email their questions to [email protected] or send them to Legal View, Khaleej Times, PO Box 11243, Dubai.