UAE REVAMPS LABOR LITIGATION PROCESS
24 December 2023
The United Arab Emirates (UAE) has introduced a significant change to its labor litigation process, granting the Ministry of Human Resources and Emiratisation (MHRE) enhanced authority to resolve labor disputes.
Dubai: The UAE's enhanced role in settling labor disputes is expected to streamline the process, reduce costs, and provide faster resolutions for both employers and employees.
This shift, will become effective on January 1, 2024. The key changes empower the Ministry of Human Resources and Emiratization (MOHRE) to play a more decisive role in resolving employment disputes, particularly those of lower value.
The new mediation process applies to labor disputes with a value of less than AED 50,000, encompassing both employers and workers as defined by the UAE Labor Law. This means that for disputes falling within this threshold, parties will no longer need to proceed through the traditional court system.
Under the new process, the MOHRE will assume the role of an adjudicator, empowered under Article 54(2) to issue final decisions in labor disputes valued below AED 50,000. These decisions carry the weight of executive deeds, meaning they can be enforced by the winning party through the usual execution procedures.
Dissatisfied parties have the right to appeal the MOHRE's decision within 15 working days of notification. The appeal is filed with the Labor Court of Appeal, and its ruling is considered final, with no further appeals permitted.
- Existing Process for High-Value Claims
For labor disputes valued AED 50,000 or more, the pre-existing process remains unchanged. These disputes will continue to undergo MHRE mediation, followed by referral to the Labor Court's Court of First Instance if mediation fails.
- Uncertainties and Ongoing Clarification
As the new process takes effect, there are still some uncertainties regarding its implementation. For instance, it remains unclear whether legal representation will be allowed during MHRE proceedings, the format and requirements for memoranda submissions, and how the MHRE will handle internal employment contracts.
- Impact on Employers and Workers
This change to the UAE labor litigation process is expected to significantly impact both employers and workers. Employers will need to adapt to the new process and understand the MHRE's adjudication powers, while workers will benefit from a potentially more streamlined and efficient dispute resolution mechanism for smaller claims.
- Preventive Measures and Salary Payments
The Decree grants the Minister the authority to issue precautionary or administrative measures to prevent individual disputes from escalating into collective disputes, safeguarding the public interest. Additionally, MOHRE can compel employers to continue paying an employee's salary for up to two months if the dispute causes a suspension of salary payments.
The UAE's has always been at the forefront of Laws development and the enhancing the Labor dispute resolution process is seen as an incremental move for both employers and employees. The aligned procedures decrease the reliance on courts with a clear guidance of the government to seek conciliation which leads to a better result, more efficient, and more amicable resolutions of labor disputes.
ALKETBI team is highly skilled and frequently provides legal assistance specializing in filing labor cases, assisting in arbitration and mediation. If you would like to know more or request further guidance with relation to the best way to solve a employee/employer conflict within the UAE, Let us know!