The UAE has recently undergone notable shifts in its approach to addressing individual labour disputes, through Federal Decree-Law No. 20 of 2023 Amending Certain Provisions of Federal Decree-Law No. 33 of 2021 Regarding the Regulation of Employment Relationships.
The objective of this revision is to modernize the process of resolving disputes, reinforce the Ministry’s role, and improve overall effectiveness and fairness in settling conflicts between employers and workers.
The revisions to Article 54 of the Labour Law introduce several significant changes to the dispute resolution mechanism:
Designated Ministry for Dispute Resolution (Article 1(1) of Federal Decree-Law No. 20 of 2023)
The updated Article maintains the initial step in which both employers and workers must submit a dispute resolution request to the UAE Ministry of Human Resources and Emiratisation (MOHRE). However, the Ministry now possesses enhanced decision-making authority in facilitating an amicable solution.
Ministry’s Decision Authority (Article 1(2) of Federal Decree-Law No. 20 of 2023)
A crucial amendment grants the MOHRE increased decision authority to issue a final decision if the value of the claim in question does not exceed AED 50,000. Additionally, if a party fails to comply with a previous amicable settlement decision, the MOHRE can mediate and make a necessary decision, regardless of the claim’s value.
Enforceability of MOHRE’S Decision (Article 1(3) of Federal Decree-Law No. 20 of 2023)
The MOHRE’s decision now holds the weight of a writ of execution, providing a stronger legal basis for enforcement. Dissatisfied parties maintain the right to challenge the decision by filing a lawsuit before the competent Court of Appeal within 15 working days, ensuring a transparent and accountable process.
Referral to Competent Court (Article 1(4) of Federal Decree-Law No. 20 of 2023)
If an amicable settlement proves challenging within the specified timeframe or in cases beyond the MOHRE’s jurisdiction, the Ministry may refer the dispute to the competent court. This referral includes a memorandum summarizing the dispute, arguments of both parties, and the MOHRE’s recommendation, fostering a comprehensive understanding of the case.
Salary Disbursement During Dispute (Article 1(5) of Federal Decree-Law No. 20 of 2023)
The amended Article acknowledges the MOHRE’s authority to instruct the employer to continue paying the worker’s salary for up to two months if the dispute leads to a suspension of salary disbursement. This provision is subject to the Implementing Regulation, ensuring financial stability for the worker during the resolution process.
Prevention of Collective Labour Disputes (Article 1(6) of Federal Decree-Law No. 20 of 2023)
The revised article introduces provisions for the MOHRE to impose additional administrative procedures or measures on an establishment, aiming to prevent the escalation of individual disputes into collective labour disputes that could harm the public interest.
Urgent Court Proceedings (Article 1(7) of Federal Decree-Law No. 20 of 2023)
The competent court is now mandated to set a hearing within three (3) working days, ensuring an immediate resolution to the dispute. This aligns with the primary goal of prompt dispute resolution.
Procedural Compliance and Time Limit for Lawsuits (Article 1(8) and Article 1(9) of Federal Decree-Law No. 20 of 2023)
The updated article underscores the importance of following procedures for the competent court to entertain a lawsuit. Additionally, it establishes a time limit, specifying that a lawsuit related to rights outlined in the law must be initiated within one year from the date of entitlement.
In conclusion, the amendment of Federal Decree-Law No. (33) of 2021, Article 54 aims to establish a fair and efficient labour dispute resolution framework. It empowers the Ministry with increased decision-making authority, ensures financial protection for workers, and introduces measures to prevent the escalation of disputes.
Effective Date (Article 2 of Federal Decree-Law No. 20 of 2023)
The amendments will be published in the Official Gazette and come into force from 1 January 2024.