In a significant move to enhance the efficiency and effectiveness of the labour dispute resolution process, the United Arab Emirates (UAE) has amended Article 54 of its labour Law. This amendment, set to take effect on January 1, 2024, grants greater powers to the Ministry of Human Resource and Emiratization, marking a paradigm shift in the handling of employment disputes.
Below are some of the key changes after issuing this amendment:
Enhanced Authority for the Ministry
- The amendment reinforces the Ministry’s role in employment dispute resolution by granting it the authority to issue a final decision in certain cases. Previously, the Ministry was required to refer disputes to the courts if an amicable settlement was not reached.
- The Ministry can now independently decide on disputes when the claimed amount is less than AED 50,000 or when a party fails to comply with a prior amicable settlement decision, regardless of the claim amount.
Direct Execution of Ministry Decisions
- In cases where the Ministry issues a decision in favour of one party, that party can now directly proceed with the execution of the decision. This streamlines the enforcement process, allowing swift resolution and implementation of decisions.
- The mechanism for execution follows the rules outlined in the UAE Civil Procedure Law, facilitating a more straightforward process for the winning party.
Exclusion of Free Zone Companies
- The requirement to file an application to the Ministry before approaching the courts is not applicable to free zone companies and their employees. Instead, such entities are directed to follow the rules of the relevant free zone authority for dispute resolution.
- While free zone employers or employees may still need a referral letter from the Ministry to approach the court, the Ministry’s role in these cases is limited to issuing the referral letter without delving into the substance of the dispute.
Expeditious Appeal Process
- Parties dissatisfied with the Ministry’s decision have the right to file a case directly before the Court of Appeal within 15 work days. This streamlining of the appeals process aims to provide a faster resolution for aggrieved parties.
- The Court of Appeal is mandated to set a hearing date within three workdays and issue a final decision within 15 workdays from the commencement of proceedings, ensuring a swift resolution.
Large Dispute Referral
- If the parties fail to settle a dispute within the stipulated timeframe and the claimed amount exceeds AED 50,000, the Ministry will refer the dispute to the competent court, along with a memorandum summarising the dispute, parties’ arguments, and the Ministry’s recommendation.
- The competent court must promptly set a date for the hearing within three workdays, emphasising the commitment to expeditious resolution even in larger disputes.
The amendments to Article 54 of the UAE labour Law reflect a proactive approach to addressing employment disputes promptly and efficiently. By empowering the Ministry and streamlining the dispute resolution process, the UAE aims to provide a conducive environment for businesses and workers alike, fostering fair and expeditious resolution of employment-related issues. These changes position the UAE as a jurisdiction committed to maintaining a balanced and effective legal framework in line with international standards.
If you are interested in an HRMS that is updated with the latest UAE Labour Law amendments, belsio HRMS is one of the best localised HRMS solutions in UAE.