The UAE’s robust economy and diverse workforce make it a dynamic place to work. However, like any employment landscape, labour disputes can arise. This article provides an overview of the most common labour disputes and presents approaches for their effective resolution in the context of Federal Decree-Law No. 33 of 2021 on the Regulation of Labour Relations (the “UAE Labour Law”).
Common Types of Labour Disputes in the UAE
- Unpaid Wages
This is perhaps the most common dispute. Employees may claim they have not received their salaries, overtime pay, or end-of-service benefits (gratuity). The UAE Labour Law mandates timely payment of wages as stipulated in the employment contract.
Wages must be paid starting from the first day of the month following the end of the agreed payment period in the employment contract. If no specific payment period is stated, employees must receive their wages at least once a month. Employers are considered in default if payment is delayed beyond fifteen (15) days from the due date unless a shorter timeframe is specified in the contract. Employees who are not paid on time can file a complaint through the Ministry of Human Resources and Emiratisation (MOHRE) website.
- Unfair Dismissal
Employees are afforded the right to contest unfair dismissals, ensuring they are not terminated without just cause or proper procedure. These protections ensure that workers’ rights are safeguard upon termination, ensuring fair treatment.
Article 44 of the UAE Labour Law specifies valid grounds for termination and the required procedures. Among these, an employer may legally terminate a worker if:
- The worker is repeatedly absent without a valid excuse for more than twenty (20) non-consecutive days in a year or seven (7) consecutive days.
- The worker discloses confidential company information, causing financial loss, missed opportunities, or personal gain.
- The worker assaults the employer, a supervisor, or a colleague, whether verbally, physically, or in any manner punishable under UAE law.
An employer may terminate an employee’s contract immediately, without notice or severance pay, in specific circumstances. These include:
- Falsifying identity or submitting forged documents, which constitutes a serious breach of trust.
- Causing substantial financial loss to the employer or deliberately damaging company property, provided that MOHRE is notified within seven (7) working days.
- Being intoxicated or under the influence of prohibited substances during working hours or engaging in misconduct that violates public morals at the workplace.
Under Article 47, an employer cannot lawfully terminate a worker for filing a serious complaint with the Ministry or a valid lawsuit against the employer. If the termination is deemed unlawful, the employer must pay fair compensation, as determined by the court, considering the worker’s role, damages suffered, and length of service. Compensation cannot exceed three (3) months’ wages based on the worker’s last salary. This compensation does not affect the worker’s right to a notice period allowance and end-of-service benefits.
- Breach of Contract
Disputes may arise from disagreements over the terms of the employment contract, including job responsibilities, working hours, or benefits. In such cases, one party may fail to meet its contractual obligations without a valid legal justification. When an employer fails to fulfill their obligations, the employee has the right to file a complaint with MOHRE.
According to Article 45 of the UAE Labour Law, the employee may resign without notice if the employer fails to comply with the terms of the contract, this Decree-Law, or any related resolutions, provided the employee notifies the Ministry at least fourteen (14) working days prior to resigning.
Likewise, if the worker fails to perform their basic duties as outlined in the employment contract and continues to breach them despite a written investigation and two written warnings of possible dismissal, the employer may terminate the worker without notice. This dismissal must be preceded by a written investigation, and the decision to terminate must be documented and justified.
- Working Conditions
The UAE Labour Law creates a strong legislative framework that supports the development of effective policies and procedures to prevent forced labour, ensuring that workers are afforded fair and decent working conditions, along with a respectful and humane work environment.
Employers must provide approved accommodation or a housing allowance and ensure workplace safety through preventive measures, training, and compliance evaluations. Employees may raise concerns about unsafe working conditions, excessive workloads, or inadequate facilities.
Resolving Labour Disputes in the UAE
The UAE has established a clear process for resolving labour disputes, primarily through the MOHRE and the labour courts. Here’s a breakdown of the typical resolution process:
- Internal Resolution
The first step should always be an attempt to resolve the issue internally. Open communication between the employer and employee can often lead to a mutually agreeable solution. Document all communication and agreements made during this stage.
- MOHRE Mediation
If internal efforts fail, the employee can file a complaint with MOHRE. MOHRE will mediate between the parties to reach a settlement.
- Referral to Labour Court
If mediation through MOHRE is unsuccessful, employees are entitled to file a lawsuit before the Labour Court, as the right to judicial recourse is guaranteed under the applicable labour laws and regulations.
- Labour Court Proceedings
The labour court will hear the case and issue a judgment. The court’s decision is binding on both parties, although appeals are possible within a specified timeframe.
Key Considerations for Employers and Employees
- Documentation
Accurate record-keeping ensures compliance with UAE labour laws and transparency in employment relationships. Employers should maintain updated records, while employees should keep copies of contracts, salary slips, and relevant correspondence for reference in disputes.
- Legal Advice
Given the complexities of labour laws, seeking legal guidance is advisable. Employers can mitigate risks through compliance, while employees can better understand their rights and legal options. Legal guidance helps employers navigate compliance requirements and avoid potential liabilities, while employees can ensure they receive fair treatment under the law.
- Compliance
Employers must adhere to labour laws, including wage protection, safety standards, and contract requirements, to avoid penalties. Employees should also be aware of their legal rights and obligations.
- Good Faith
A cooperative approach to workplace disputes encourages fair resolutions. Open communication, mediation, and internal resolution mechanisms can help avoid prolonged legal conflicts.
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