As of August 31, 2024, crucial amendments to Article 54 of the UAE Labor Law will extend the statute of limitations for labor claims and alter the appeal process for disputes under AED 50,000. Discover how these changes will impact both employers and employees.
Article 54 of the UAE Federal Decree-Law No. 33 of 2021 on the Regulation of Labor Relations (the “UAE Labor Law”) has undergone significant changes through Article 1 of Federal Decree-Law No. 20/2023 and subsequently through Article 1 of Federal Decree-Law No. 9 of 2024 (the “New Decree”). Key amendments include:
a. Value of Claim: Any dispute between the employer and employee arising from employment relationship where the value of the claim does not exceed fifty thousand dirhams (AED50,000) or in case the dispute results from non-compliance by either party on the amicable settlement decision previously issued by the Ministry of Human Resources and Emiratization (the “Ministry”) and regardless of the value of the claim, either party must submit a claim for dispute resolution to the Ministry.
b. Ministry’s Decision as a Writ of Execution: The decision of the Ministry issued on the dispute shall have the power of a writ of execution and shall be stamped with the executory formula according to the usual procedures.
c. Court of First Instance for lawsuits against the Ministry’s Decision: Lawsuits challenging the Ministry’s decision must now be filed with the Court of First Instance (the “CFI) rather than the Court of Appeal. Claims must be submitted within 15 working days from the date of the notification of the decision. The CFI shall set a hearing date within 3 working days from the date the case is filed and shall decide thereon within 30 working days from the date of which the lawsuit is filed. The CFI judgment shall be final. The filing of this lawsuit shall automatically suspend the execution of the Ministry’s decision that is the subject of the lawsuit until it is decided.
d. Statute of limitation for Filing Labor rights: The statute of limitations for claiming labour rights under the UAE Labour Law has changed from one year from the date of entitlement of the right to two (2) years from the date of termination of the employment relationship.
e. Pending Cases Transition: Article 2 of the New Decree provides that any pending requests, disputes or grievances before the Court of Appeal at the time of the entry into force of this amendment, on 31 August 2024, will be transferred to the CFI for adjudication without additional fees.
Reda Hegazy is a Partner at Alsuwaidi & Company. He is listed Legal Consultant in the Government of Dubai Legal Affairs Department, a Member of the DIAC 40, Young Practitioners Group in Dubai International Arbitration Centre (DIAC), a certified arbitrator and member of the International Commercial Arbitration Centre (ICAA) in Sharjah (Tahkeem).
To speak to Reda directly, contact him at r.hegazy@alsuwaidi.ae
