UAE Enacts Progressive Amendments for Enhancing the Labor Dispute Resolution Process

Introduction:

In a move to enhance and regulate labor relations within the United Arab Emirates (UAE), President Sheikh Mohammed bin Zayed Al Nahyan has issued Federal Law Decree No. 20 of 2023. This decree amends certain provisions of Federal Law Decree No. 33 of 2021 concerning the organization of labor relations. The official announcement was made in the Official Gazette of the UAE, Issue No. 759 (Supplement), in the fifty-third year, dated 29 Safar 1445 H, corresponding to September 15, 2023.

Background:

The amendments outlined in the decree aim to provide a comprehensive framework for resolving disputes between employers and employees, reinforcing the UAE’s commitment to fostering a fair and balanced work environment. The changes impact Article 54 of Federal Law Decree No. 33 of 2021, introducing modifications to the mechanisms involved in dispute resolution.

• Key Amendments:

The primary modification involves the process for handling disputes between employers and employees. If a conflict arises regarding any rights under the provisions of the decree, the concerned party must submit a request to the Ministry of Human Resources and Emiratization (MOHRE). The ministry will then examine the application and take necessary measures to amicably settle the dispute.

The MOHRE will issue a final decision if the dispute involves a claim not exceeding AED 50,000 or if there is a disagreement over compliance with a previous amicable settlement. The ministry’s decision will be immediately enforceable, and either party may file a lawsuit with the relevant appellate court within 15 working days of being notified of the decision.

If the claim exceeds AED50,000, should an amicable settlement prove unattainable within the stipulated timeframe or in exceptional circumstances, the MOHRE has the authority to refer the dispute to the appropriate court. During the dispute, the ministry has the option to compel the employer to continue paying the employee’s salary for a maximum of two months if the conflict leads to a suspension of salary payments. Additionally, the decree empowers the minister to impose administrative measures on the establishment to prevent individual disputes from escalating into collective labor disputes that could harm public interest.

The court, upon receiving the dispute, is obligated to schedule a session within three working days, inform the parties, and reach a verdict directly. The court may reject the lawsuit if the procedures outlined in the decree are not followed, and no lawsuit can be filed after one year from the date the right becomes due.

• Conclusion:

The issuance of Federal Law Decree No. 20 of 2023 reflects the UAE’s ongoing commitment to refining its legal framework to address the evolving needs of the labor market. By introducing these amendments, the UAE aims to streamline dispute resolution processes, ensuring a fair and efficient mechanism for both employers and employees. The decree came into effect on January 1, 2024, marking a significant milestone in the continuous development of the UAE’s labor laws.

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