Tim Elliott
It’s another edition of Lawgical, the first regular podcast navigating the latest legal updates shaping the United Arab Emirates. Welcome, I’m Tim Elliott, and as ever, I’m with Ludmila Yamalova, managing partner of the Dubai-based legal firm Yamalova & Plewka. Ludmila, it’s always great to chat with you.
Ludmila Yamalova
It’s great to be here, Tim, as always. Thank you.
Tim Elliott
Now, today we’re going to look at recent changes to the UAE employment law. It’s a topic that comes up very regularly.
Now, these are changes introduced under Federal Decree Law No. 9 of 2024. These changes impact both employers and employees in quite important ways, I think. Ludmila, let’s start, if you don’t mind, with a quick overview.
Ludmila Yamalova
Indeed. From a legal standpoint, let me just set the frame. As you rightfully said, Federal Decree Law No. 9 of 2024 is based on amendments to our existing labor law, which is Law No. 33 of 2021.
There is the fundamental, overarching UAE labor law, and this particular decree is just an amendment to that. It doesn’t replace the law or function as a separate law. It’s an amendment—a continuation of the existing employment law. Because of that, the amendments specifically relate to two articles in the main law: Articles 54 and 60.
So, Federal Decree Law No. 9 of 2024 is not a complete overhaul of the UAE labor law. It’s a targeted update to two very specific provisions in the current law, which remains in effect. The focus of these amendments is on giving more time for labor claims, expediting dispute resolutions, and enforcing stricter penalties for violations.
The overarching goals of the amendments are to speed up claims, resolve disputes efficiently, allow more time for parties to address their issues, and impose stringent penalties for non-compliance with employment laws.
Tim Elliott
A significant update, to me, seems to be the extended time to file an employment case. That kind of stands out.
Ludmila Yamalova
Absolutely. That’s a noteworthy change, especially from my perspective. I’ve been in the UAE for 16 years, practicing law exclusively here during that time, and we’ve dealt extensively with employment cases. Under both the previous and current laws—Law No. 33 of 2021, which replaced the earlier law in 2021 and became effective in 2022—the statute of limitations to bring employment cases has always been one year.
The statute of limitations refers to the time period during which parties can bring disputes against one another concerning employment matters. For example, if an employee is terminated or resigns from a company, the statute defines the period during which they can still bring a case against the company.
This covers claims related to employment, such as an employee being terminated and receiving only part of their end-of-service benefits or other payments. Sometimes, there’s an agreement between the company and the employee for staggered payments. If these payments don’t materialize or the company fails to pay entirely, such disputes arise. Until now, the period to address these cases was just one year.
While one year may sound sufficient, in practice, it often isn’t. The objective of this statute of limitations has always been to provide both parties with a sense of closure. Companies should be able to move forward without worrying about claims being raised 15 years later, and employees should have similar assurances regarding actions against them.
Tim Elliott
Why is the statute of limitations so much shorter for employment cases?
Ludmila Yamalova
Employment cases naturally lend themselves to shorter statutes of limitations. Unlike other legal matters, which may have statutes of 10, 15, or even 20 years, employment law focuses on resolving issues quickly. This makes sense given the nature of employment, where people rely on their work for their livelihoods.
In the UAE, we also have specialized labor courts. These exist to expedite employment-related disputes. The idea is to avoid prolonged battles over employment rights because it directly impacts people’s ability to earn a living. Employment law is structured this way to prioritize efficient resolution, and specific courts and authorities are established to handle these cases.
Previously, the statute of limitations was one year, but extending it to two years is a welcome change. From practical experience, this extended period makes sense. Many cases involve situations where companies promise to fulfill obligations over time, but delays and broken promises eventually run out the clock on the statute of limitations.
Tim Elliott
What about the employers’ perspective on this change?
Ludmila Yamalova
From an employer’s standpoint, the extension also makes sense. Let’s say a finance employee mismanages company books. It may take months—or even years—for the company to uncover discrepancies. This could include errors or even embezzlement. While embezzlement is a criminal offense, compensation claims fall under labor law.
In these cases, having a longer period to address such disputes is logical. While the government hasn’t explicitly outlined its motivation for this extension, I can say from our vast experience with employment cases that this will benefit many parties.
Tim Elliott
Another change focuses on appealing decisions from the Ministry of Human Resources, particularly for lower-value claims.
Ludmila Yamalova
Yes, this is another important update. Under the current employment law—facilitated by Law No. 33 of 2021—claims below AED 50,000 are now treated differently.
Previously, all cases followed the same path, requiring formal court proceedings. This was time-consuming and costly, especially for smaller claims. Now, disputes under AED 50,000—around USD 15,000—are resolved directly by the Ministry of Human Resources and Emiratization (MoHRE).
MoHRE, as a regulatory authority, offers a less formal process than the courts, making it faster and more accessible. This is particularly beneficial for employees who might not afford legal representation.
If a party disagrees with MoHRE’s decision, they can appeal to the Court of First Instance, instead of the Court of Appeals. This procedural change helps resolve smaller claims quickly and efficiently.
Tim Elliott
Let’s talk about fines. It seems like penalties for labor violations have increased significantly.
Ludmila Yamalova
That’s correct. Penalties for violating employment laws now range from AED 100,000 to AED 1,000,000. These fines target companies—and sometimes employees—who violate key aspects of labor law, such as hiring without a valid work permit or failing to pay employees when closing a company.
This increase in penalties also addresses the issue of companies that “sell” visas—a practice the UAE has been working to phase out. Companies or individuals involved in such activities face hefty fines, which serve as a deterrent.
Tim Elliott
There are also new penalties related to Emiratization. What’s happening there?
Ludmila Yamalova
Yes, this amendment addresses fraudulent practices related to Emiratization initiatives. Companies that falsely claim to meet Emiratization quotas or misuse associated benefits now face fines of up to AED 1,000,000. Additionally, they must return any subsidies received.
Employers cannot pass these penalties onto employees, ensuring that the responsibility lies solely with the company.
Tim Elliott
It seems like these changes reflect a broader trend of stricter compliance and enforcement in the UAE.
Ludmila Yamalova
Absolutely. The UAE is moving towards a more structured and efficient legal system. Employment cases are being resolved faster, with authorities like MoHRE playing a more active role. These legislative changes aim to make justice accessible and disputes less burdensome.
Tim Elliott
That wraps up this episode of Lawgical. Thanks, Ludmila, for sharing your insights.
Ludmila Yamalova
Always a pleasure, Tim.
Tim Elliott
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