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An overview of Federal Decree-Law No. (20) of 2023, concerning jurisdictional rules regarding labour disputes

Recently, His Highness Sheikh Mohammed bin Zayed Al Nahyan, in his capacity as the President of the United Arab Emirates, issued Federal Decree-Law No. (20) of 2023 amending certain provisions of Federal Decree-Law No. (33) of 2021 regarding the regulation of the employment relationship. 

The decree will come into effect on January 1, 2024 and introduces substantial amendments concerning specialized jurisdiction rules pertaining to certain labour disputes. 

The primary goal of these amendments is to accelerate the resolution of labour disputes and achieve greater stability. Below, we shed light on the most significant of these amendments:

1. To safeguard the rights of workers and prevent lengthy labour disputes before the judiciary, the authority to adjudicate simple labour claims has been delegated to the Ministry of Human Resources and Emiratization for the first time. Paragraph (2) of Article (54) of Federal Decree-Law No. (20) of 2023, stipulates that the Ministry of Human Resources and Emiratization has the jurisdiction to issue a binding decision in labour disputes presented to it by the employer or employee, provided that the value of the claim does not exceed AED 50,000. This authority also extends to labour disputes related to the non-compliance of either party, with a previous amicable settlement decision issued by the Ministry, irrespective of the claim's value. Prior to the issuance of this decree, the role of the Ministry was limited to referring such cases to the courts for adjudication, where settlements for these disputes were unattainable.

2. Paragraph (3) of Article (54) stipulates that the Ministry's decision to adjudicate the dispute in accordance with its jurisdiction as specified in paragraph (2) of this Article shall have the force of an execution instrument and be executed in the customary manner.

3. In addition to the above, the wording of this paragraph allows either party to the dispute, within (15) days from the date of notification of the Ministry’s decision, to file a lawsuit before the competent Court of Appeal to review the substance of the dispute. The judgment issued by the Court of Appeal is final and not subject to appeal, and the filing of such a lawsuit results in the suspension of the execution of the Ministry's decision.

4. It is worth mentioning that paragraph (9) of Article (54) of that decree has classified the adherence to the procedures mentioned above as part of the public order. Consequently, if these procedures are not followed the court is mandated to dismiss any such lawsuit brought before it on the grounds of inadmissibility.

The significance of this amendment evidently lies in its role of reducing the backlog and accumulation of lower valued lawsuits in courts, while aiming to expedite their resolution. The majority of such labour claims are often brought by low-income workers, therefore a swift resolution prevents the hassle and expense of being in court. 

The amendment also allows the courts more time to consider and delve into other significant and complex labour disputes, which require resolute focus and thorough examination to reach a just outcome.

This article was written by litigation lawyers Asim Ahmed and Ahmed Labib, and focuses on labour disputes in the UAE. 

BSA is a regional Law Firm in the Middle East with offices in the UAE, Oman and Saudi Arabia. As a full-service law firm our practice areas include litigation, arbitration and corporate services, including M&A, banking & finance, Intellectual Property, TMT, Fintech, employment and insurance.

Published on 3 October, 2023.

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