Disputes With Employees

Overview

Labour disputes in the United Arab Emirates (UAE) are governed by Federal Decree-Law No. 33/2021 On Regulation of Labour Relations, which came into effect on 2 February 2022.

It outlines specific rights and obligations for both employers and employees in labour dispute situations, including entitlement to unpaid wages, and the employer's right to terminate employment for just cause, ensuring fair treatment during the dispute resolution process.

In addition, Federal Decree-Law No. 33/2021 divides employee disputes into two main categories, which are individual or collective, with each category having a different definition according to its nature and procedures. Labour disputes are handled by two authorities in the UAE, i.e., the Ministry of Human Resources and Emiratisation (MOHRE) and the Labour Courts. Federal Decree-Law No. 33/2021 mandates that all labour disputes must first be referred to the MOHRE for mediation, and only unresolved cases should be escalated to the Labour Courts for adjudication, ensuring an emphasis on amicable resolution before litigation.

Introduction

Federal Decree-Law No. 33/2021 sets clear rights and responsibilities for both employers and employees in the context of disputes and aims to provide a fair and equitable legal framework that protects workers while also acknowledging an employers' legitimate concerns, promoting an efficient dispute resolution process.

Legal framework

Labour disputes in the UAE are governed by Federal Decree-Law No. 33/2021, which regulates employment relationships. It establishes a structured process for resolving disputes, emphasising amicable solutions before legal proceedings. All labour disputes must first be referred to the MOHRE for mediation, where efforts are made to reach a mutual agreement between the

parties involved. If a resolution cannot be achieved, the dispute is then escalated to the Labour Courts for formal adjudication. Protection of employee wages

Additionally, Federal Decree-Law No. 33/2021 has regulatory guidelines that set several controls to safeguard the rights of both parties and prevent disputes, especially regarding the payment and deposit of employee salaries.

The MOHRE has adopted a robust system called the Wage Protection System (WPS), which is linked to the employee's labour card and the employer's data at the MOHRE. This system ensures that the employee's salary is deposited, and both parties can review it in case of any disputes. The MOHRE can also access the information when a complaint related to the employee's

financial rights is registered.

This system is an ideal way to protect the rights of employees and employers alike, especially in a large and diverse working environment with multiple nationalities and companies operating in different fields.

Types of labour disputes

Federal Decree-Law No. 33/2021 has assigned a different name to each type of dispute depending on the number of employees involved. The categories include:

• Individual labour disputes: Any conflict between an employer and a single employee that concern matters addressed by Federal Decree-Law No. 33/2021, Cabinet Decision No. 1/2022 On the Implementing Regulation of Federal Decree-Law No. 33/2021 Regarding the Regulation of Employment Relationships, and the decisions issued in implementation of it.
• Collective labour disputes: Any conflict between an employer and two or more employees, involving issues that concern the collective interests of all employees or a group of them.

Monetary claims v non-monetary claim

In terms of categorising employee disputes based on their subject, they can also be divided into the following two types:

• Monetary claims: These are claims that can be valued in monetary terms, such as labour rights granted by Federal Decree-Law No. 33/2021. These include, claims for wages, end-of-service benefits, annual leave, and other requests with a specific financial value. This also includes claims from the employer against the employee, such as damages and losses caused by the employee's negligence in performing their duties and claims from the employer regarding advances or other financial claims.
• Non-monetary claims: These are claims that cannot be valued in terms of money, such as a worker's request for the return of a passport that the employer has withheld, or a worker's request for a certificate of experience after completing their employment.

Authority hearing the dispute

In terms of categorising employee disputes based on the authority that examines and issues the decision/judgment, there are two categories. It is important to note that in all cases, disputes from either the employer or the employee must first be submitted to the MOHRE through a labour complaint, regardless of the subject or value of the complaint. This is in accordance with article 54 of Federal Decree-Law No. 33/2021, which mandates that all complaints must first be registered with the MOHRE to explore the possibility of reaching a settlement between the two parties.

This process is crucial in helping to save time and effort if a settlement is reached, and once a settlement is made by the MOHRE, it is treated as a ruling, and it is registered as an enforcement file if either party fails to comply with the agreement.

Disputes examined by the MOHRE

Where the MOHRE issues a decision based on the value of the dispute, as stipulated in article 54 of Federal Decree-Law No. 33/2021, according to the judicial experience in applying the provisions of this article, any individual dispute registered by either the employer or the employee, where the value of the claim does not exceed AED 50,000, will be resolved by the MOHRE

without the need for court intervention.

Under previous laws, all disputes were referred to the courts, regardless of their value. However, article 54 of Federal Decree-Law No. 33/2021 makes the MOHRE decision equivalent to a court judgment for disputes of smaller value. At the same time, Federal Decree-Law No. 33/2021 allows either party to appeal the decision of the MOHRE in a competent court within 15 days

of being informed of the decision. There is also another type of dispute between the employer and employee, which has a non-financial or non-material nature.

In this case, one party demands an administrative action against the other, such as an employee filing a complaint with the MOHRE to cancel a work permit, to cancel residency, or to require the employer to implement the employment contract as agreed. Another example is when the employer files a complaint against the employee for absenteeism or cessation of work without valid reason, known as a "failure to report". This applies if the employee has been absent from work for more than seven days without notifying or contacting their employer. In such cases, the employer protects their right and others from the risk of the employee working for another employer or violating their employment status.

Disputes referred to the Labour Court

These are disputes between the employee or the employer that exceed AED 50,000. The reason for this is that larger value disputes typically involve a larger volume of documents and evidence that require thorough examination by the court.

Moreover, disputes settled by the MOHRE do not allow for certain means of evidence, such as witness testimonies or oathtaking, which are available in the Labour Court process. Therefore, these disputes are designated for the court rather than the MOHRE.

Conclusion

Federal Decree-Law No. 33/2021 provides a comprehensive legal framework for addressing labour disputes, ensuring a balance between protecting employee rights and safeguarding employer interests. Through structured procedures involving the MOHRE and the law emphasises amicable resolution, streamlines processes for smaller disputes, and ensures judicial oversight for larger or more complex cases. With mechanisms such as the WPS and clear guidelines on monetary and non-monetary claims, Federal Decree-Law No. 33/2021 promotes fairness, transparency, and efficiency in managing employment relationships in the UAE's diverse workforce.

This article is first published by LexisNexis

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.