UAE: Federal Law on Labour Relations Organisation Issued

Al-Bayan, 12 August 2024: The UAE has issued a new federal decree-law amending provisions of the existing labour relations regulations. This move aligns with the country’s continuous efforts to develop a robust legislative framework that ensures an efficient and competitive labour market.

The primary objectives of the new decree-law are to regulate labour relations in a balanced manner, clearly defining the rights and obligations of all parties involved. Additionally, to provide comprehensive protection for workers and employers, enabling them to exercise their rights within a well-defined legal framework.

Lastly, to enhance the overall competitiveness of the UAE’s labour market.

Stringent penalties have been introduced for violations related to unauthorised employment practices.
Individuals found employing workers without proper authorisation, bringing in workers and leaving them without employment, misusing work permits, or closing facilities without settling workers’ rights will face fines ranging from AED 100,000 to AED 1 million.

Strict measures have been put in place to protect juvenile workers.
Employers found violating provisions related to the employment of minors will face similar hefty fines.
Additionally, individuals who agree to employ juveniles in violation of the law, including those with guardianship or custody over the minors, will also be subject to penalties.
Employers are now mandated to take necessary measures to settle the rights of workers in accordance with the new decree-law, its executive regulations, and related decisions before closing facilities or suspending operations.

The UAE’s proactive approach to enhancing its labour laws demonstrates its commitment to creating a fair and transparent work environment that safeguards the interests of both employers and employees.
These amendments are expected to further strengthen the country’s position as a preferred destination for skilled professionals and businesses seeking a robust and well-regulated labour market.

The UAE Government announced fines ranging up to Dh1 million on Monday after a Federal Decree-Law was issued, amending specific provisions of the Federal Decree-Law on the Regulation of Employment Relationships.

A fine ranging from Dh100,000 to Dh1 million will be imposed on employers for employing a worker without a work permit or bringing them without providing any job. The same fine will also apply for closing a business without settling the rights of workers, taking part in fraudulent labour acts including fraudulent employment or fictitious Emiratisation, employing a minor in violation of the law, and engaging in any act of circumvention of the laws or regulations governing the labour market, including fictitious employment.

As per the new provisions, the penalties will multiply based on the number of workers fictitiously employed.

Additionally, The Ministry of Human Resources and Emiratisation is now authorised to make a settlement provided that the employer pays 50 per cent of the minimum value of the fine and pays back to the government the financial incentives obtained by the fake employees.

The new decree stipulates that any criminal proceedings for fictitious employment, including fake Emiratisation, can only be initiated at the request of the Minister of Human Resources and Emiratisation or his/her authorised representative.

The decree also states that any disputes between employers and employees should be referred to the Court of First Instance rather than the Court of Appeal, if there is a disagreement with the decision made by the Ministry of Human Resources and Emiratisation in resolving the dispute.

This applies to all cases except for those disputes that have been adjusted or reserved for the issuance of a judgement.

Starting from the date of implementation of the provisions, the Court of Appeal is required to refer all requests, disputes and grievances regarding the regulation of employment relations to the Court of First Instance.

As per the new provisions, the court shall revoke proceeding with any claims filed after two years from the termination of the employment relationship.

This decree is part of the country’s ongoing efforts to develop its legislative and legal framework.
It aims to ensure the efficiency and competitiveness of the labour market, regulate employment relationships, and clearly define the rights and obligations of all parties involved, and ensure their protection by law.

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UAE: Reveals VAT Guidelines for Charities

The Federal Tax Authority (FTA) in the UAE has released comprehensive guidelines outlining the VAT treatment for charities operating in the country.

The guidelines, titled “Charities VAT Guide,” provide clarity on various aspects of VAT compliance for charitable organisations.

One of the key highlights of the guidelines is the introduction of the concept of “designated charities.”

These are charities that meet specific criteria, such as being approved by the Community Development Ministry, operating on a not-for-profit basis, and being primarily funded by grants or donations.

Designated charities will be eligible for a special VAT recovery scheme, allowing them to reclaim VAT incurred on expenses related to both taxable and non-taxable activities, except for exempt supplies.

A spokeperson from the FTA has stated that the guidelines aim to support the charitable sector in the UAE by providing a clear framework for VAT compliance.

Designated charities will benefit from the special VAT recovery rules, enabling them to maximise their resources for charitable purposes.

The document outlines the criteria for a charity to be recognised as a designated charity and the process for obtaining this status.

It also clarifies the VAT treatment of various activities undertaken by charities, such as business activities subject to VAT, non-business activities, and donated goods and services.

For charities that do not qualify as designated charities, the guidelines explain the standard VAT recovery rules.

These charities can only recover VAT on costs related to taxable supplies, following a prescribed input tax apportionment method.

The guidelines also address special situations, such as the VAT treatment of sales or leases of new buildings to charities.

The first supply of a new building specifically designed for a designated charity’s relevant charitable purpose will be subject to VAT at the zero rate, providing a cash-flow benefit.

The UAE Cabinet has issued several decisions listing the charities recognised as designated charities, eligible for the special VAT recovery rules.

The guidelines provide an updated list of these designated charities.

The FTA has emphasised the importance of charities familiarising themselves with the guidelines and ensuring compliance with the VAT regulations.

Failure to comply may result in penalties and other legal consequences.

With the release of these comprehensive guidelines, the UAE aims to support the charitable sector while ensuring a fair and transparent VAT system.

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UAE: Unveils First Licensed Lottery Operation, Establishes Gaming Regulatory Framework

Khaleej Times, 29 July 2024: The UAE has announced the launch of its first licensed lottery operation.

This is significant milestone in the establishment of a comprehensive regulatory framework for commercial gaming activities in the country.

The General Commercial Gaming Regulatory Authority (GCGRA), a federal entity, has unveiled the regulatory framework designed to protect consumers by ensuring fairness and transparency across all licensed commercial gaming activities, including lotteries.

The GCGRA emphasised that any unlicensed commercial gaming operations in the UAE are illegal for both operators and players, highlighting the importance of the newly established regulatory framework.

The Game LLC, a commercial gaming operator based in Abu Dhabi, has been granted the first license to operate under the banner of the ‘UAE Lottery’.

The company specialises in game development, lottery operations, and gaming-related content, promising to offer a diverse range of lottery and other games catering to various player interests and financial preferences.

However, specific details about the types of games to be offered have not been disclosed yet.

According to the GCGRA, commercial gaming refers to any game of chance or combination of chance and skill where money or valuable items are wagered for the purpose of winning.

This definition includes gaming machines, internet gaming, electronic skill-based games, lottery games, event wagering (including bets placed on sporting events or horse racing), and any other form of commercial gaming regulated and licensed by the GCGRA.

Engaging in, operating, or facilitating commercial gaming activities without a valid license is unlawful and will result in legal action, including criminal penalties.

Participating as a player in activities offered by unlicensed operators, whether online or at a physical venue, is also illegal and may subject individuals to severe penalties.

The GCGRA has emphasised the importance of responsible gaming practices, enforcing safeguards across every aspect of the gaming experience, from game design to marketing strategies and the provision of player support services.

The authority aims to minimise the potential adverse consequences of excessive gaming for individuals and society, promoting commercial gaming as an entertainment and leisure activity rather than a means to generate income or make money.

With the establishment of the regulatory framework and the licensing of the UAE’s first lottery operator, the GCGRA aims to create a safe and transparent environment for commercial gaming activities in the country, while also addressing potential risks associated with unlicensed operations.

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