"The UAE has made notable amendments to its employment law in 2024, focusing on employee protection and streamlining dispute resolution processes in the labour courts. These 2024 amendments are likely to have significant impact in 2025, primarily in relation to legal proceedings, employer compliance and employee rights."
This year has seen some key employment developments in the United Arab Emirates (UAE) for employer-employee relationships, while providing an insight into the implications of such developments for employers operating in the UAE. This article outlines the key highlights from 2024 and looks ahead to 2025.
2024: HIGHLIGHTS
- Extended time frame for labour claims: Employers and employees now have two years from the termination of the employment relationship to file a labour claim, an increase from the previous limit of one year.
- Simplified dispute resolution: Claims valued under AED 50,000 are now handled solely by the Court of First Instance (eliminating the option to appeal to higher courts), aiming to expedite the resolution of small cases. Higher value claims would still follow the standard legal process.
- Increased penalties for employer violations: Fines for labour law violations have been significantly increased, now ranging between AED 100,000 and AED 1 million, depending on the specific violation.
- Enhanced employee protections during disputes: In cases where an employee's wages are withheld during 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, preventing financial hardship for employees awaiting dispute resolution.
2025: OUTLOOK
- Prolonged statute of limitation: The new two-year time line for filing employment claims may lead to an increase in claims in 2025, as parties who previously felt pressured by the one-year deadline now have more flexibility to file a claim.
- Enhanced penalties and compliance: In our view, the significant increase in fines for employer violations will lead to employers being more careful about compliance in 2025 and beyond. This includes ensuring all employees have the necessary work permits and that employee entitlements are fully settled, especially as businesses shut down and operations change.
Overall, the changes we have seen in 2024 signal a stronger regulatory environment in the UAE, focusing on the better treatment of employees and a more streamlined judicial process, while encouraging employers to adopt strict compliance and fair employment practices.
Visit us at mayerbrown.com
Mayer Brown is a global services provider comprising associated legal practices that are separate entities, including Mayer Brown LLP (Illinois, USA), Mayer Brown International LLP (England & Wales), Mayer Brown (a Hong Kong partnership) and Tauil & Chequer Advogados (a Brazilian law partnership) and non-legal service providers, which provide consultancy services (collectively, the "Mayer Brown Practices"). The Mayer Brown Practices are established in various jurisdictions and may be a legal person or a partnership. PK Wong & Nair LLC ("PKWN") is the constituent Singapore law practice of our licensed joint law venture in Singapore, Mayer Brown PK Wong & Nair Pte. Ltd. Details of the individual Mayer Brown Practices and PKWN can be found in the Legal Notices section of our website. "Mayer Brown" and the Mayer Brown logo are the trademarks of Mayer Brown.
© Copyright 2024. The Mayer Brown Practices. All rights reserved.
This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.
