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On September 13, 2023, the United Arab Emirates (UAE) enacted Federal Decree-Law No. 30 of 2023 (the “Decree”), which has introduced significant amendments to the UAE Labour Law No. 33 of 2021 (the “Labour Law”). While the introduction of Labour Law in 2021 was a significant legislation aimed at effective regulation of employment relationships in the UAE, the new amendments under the Decree propose to further clarify some of the provisions in the Labour Law.

These amendments in the Decree are set to take effect on January 1, 2024, with a key focus on improving the resolution of labour disputes between employers and workers. The Decree has made significant amendments to Article 54 of the Labour Law, which relates to individual labour disputes, giving additional powers to the Ministry of Human Resources (“MOHRE”) to amicably resolve these disputes. Key changes introduced by the Decree are summarised as follows.

Key Amendments Introduced by the Decree.

• Submission of Dispute Requests

Under the unamended Article 54 of the Labour Law, any dispute between the employer and worker or where such employer, worker, or any entitled party disputes any labour rights derived from an employment relationship, a request would be submitted to MOHRE for an amicable resolution of the dispute, and if such resolution was not possible, the MOHRE would refer the dispute to the competent court.

The Decree provides for MOHRE to take necessary actions to settle the dispute amicably, with MOHRE having the power now to issue final decision on a dispute when the value of the claim in question does not exceed AED 50,000. Additionally, disputes related to non-compliance with previously issued amicable settlement decisions by either party, regardless of the claim’s value, will also be resolved by the MOHRE.

• Binding Ministry Decisions

Given that MOHRE has the power to issue final decisions, the Decree also provides that such decisions are enforceable, having the force of an executive deed (i.e, such decisions will be executed in accordance with standard procedures of the UAE Civil Procedures Law).  Either party dissatisfied with the MOHRE’s decision has the option to contest such decision by filing an appeal before the competent court of appeal within fifteen (15) working days of being notified of the decision. The court will promptly hear and decide on the case.

• Stay of Execution

Filing a case with the competent court of appeal results in the stay of the execution of the MOHRE ‘s decision. This legal provision allows parties to seek judicial review of the MOHRE’s decision if they believe it to be unjust or incorrect.

• Continuation of Wage Payments

During the course of a dispute, the MOHRE may require the employer to continue paying the worker’s wages for a maximum perid of two (2) months, especially if the dispute leads to the suspension of wage payments.

• Statute of Limitations

It’s important to note that actions related to any rights under the UAE Labour Law must be filed within one year from the date of maturity of the right subject to the claim.

The Decree aims to enhance the efficiency and fairness of labour dispute resolution, benefiting both employers and workers. Effective January 1, 2024, it is crucial for all parties involved in labor disputes to be aware of these changes and seek appropriate legal counsel when necessary.

Conclusion

In summary, the recent amendments to the UAE Labour Law, brought about by the Decree marks a significant step towards a more efficient and equitable labour dispute resolution process, especially small claims.

These changes, set to take effect on January 1, 2024, prioritize amicable settlement between the disputing parties, focusing on efficient and quick redressal, and reducing the need for prolonged and expensive legal battles.

The Decree proposes to further streamless the process of amicable resolution of labour disputes, provide effective protection for workers’ rights and gives power to MOHRE to decide small claims in an efficient and prompt manner, and accordingly, the Decree stands to benefit both employers and employees in the UAE.

As these reforms come into play, it is crucial for all parties involved to familiarize themselves with the updated regulations and, when necessary, seek legal guidance to navigate the evolving landscape of labour disputes in the UAE.

Prepared by:

Mohamed Abdelrehiem – Partner
Malack Elmasry – Partner
Mariam Quadri – Associate
Youssef Diab – Paralegal