On September 7, 2023, the UAE Cabinet enacted Federal Decree-Law No. 20 of 2023, introducing pivotal amendments to Article 54 of the Federal Decree-Law No. 33 of 2021 Regarding the Regulation of Employment Relationship (“Labor Law”). These amendments are scheduled to take effect on January 1, 2024, marking a significant shift in labor dispute resolution in the UAE.
Encouraging Non-Adversarial Resolution: The new Article 54 mandates that any disputes regarding rights under the Labor Law must now be filed with the Ministry of Human Resources and Emiratization (MOHRE). Subsequently, MOHRE shall undertake the necessary measures to facilitate an amicable resolution.
Decisive Authority on Claims: Should an amicable settlement remain unreachable, MOHRE is empowered to issue a conclusive decision on disputes (a) where the claim value does not exceed AED 50,000, or (b) where there is non-adherence to a previously agreed amicable settlement, irrespective of the claim’s value.
Enforceability and Right to Appeal: MOHRE’s decisions are binding and enforceable. However, either party has a 15-working-day window to appeal the decision before the Court of Appeal. The appeal will automatically suspend the execution of MOHRE’s decision. The Court of Appeal has to schedule a hearing within 3 business days and deliver a judgment within another 15 business days. Such judgment is deemed final and immutable.
Safeguarding Workers’ Income: In a significant move towards worker welfare, if a dispute leads to a suspension of the worker’s wages, MOHRE can compel the employer to continue wage payments for up to 2 months, to ensure that the worker is not financially disadvantaged during the resolution process.
Referral to Competent Courts: For disputes falling outside MOHRE’s stipulated parameters or when an amicable settlement is not attainable, MOHRE shall refer the matter to the competent court, accompanied by a comprehensive memorandum detailing the dispute’s essence.
Expedited Proceedings: To expedite the legal process, the competent court shall schedule a hearing within 3 business days of receiving the dispute referral and shall ensure timely and speedy resolution of disputes. The timeline for a judgment to be rendered, however, remains unspecified.
Statute of Limitations
The newly introduced Article 54 imposes a one-year statute of limitations for employment claims, starting from the date the right in question becomes due. This stipulation means that once the one-year period has passed, a claim can no longer be filed, and the right to sue is lost regardless of the merits of the claim.
In conclusion, the new Article 54 reaffirms the UAE’s commitment to a harmonious labor environment that prioritizes the protection of rights, efficient and amicable resolution of disputes, and the safeguarding of business interests. Through these amendments, the UAE intends to expedite minor disputes, easing the load on the judicial system.
Revealing a key amendment to UAE Labor Law that redefines employment dispute resolution! Our Senior Associate Khaled Mehdi breaks down what’s new in Article 54 and what it means for employers and workers. Starting January 2024, these updates could affect how you handle workplace issues. Check out our Insightful Analysis for all the details. For more insights into how these amendments might affect your business and workforce, please contact Law House. We are dedicated to providing you with expert legal guidance and support.