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Employment Law in the UAE: Understanding Federal Decree Law No. (20) of 20237 min read

Author: Derya Bandak
Managing Partner Attorney at German Law

The employment law landscape in the United Arab Emirates has undergone a significant transformation with the introduction of the Federal Decree Law No. (20) of 2023. This legislation amends key aspects of the Federal Decree Law No. (33) of 2021, bringing about crucial changes that impact both employers and employees. The decree introduces a more streamlined dispute resolution process, establishes clear guidelines for the involvement of the Ministry of Human Resources and Emiratisation (MoHRE), and sets forth new regulations for handling employment-related disputes.

This article will explore the specifics of these changes, examining how they aim to foster a more efficient, fair, and transparent employment landscape in the UAE. From the empowerment of the MoHRE in rendering final judgments to the introduction of specific timelines for legal proceedings, these amendments signify a progressive step towards enhancing the legal framework governing employment relationships.

Dispute Resolution

Employers, employees, and their beneficiaries can dispute any rights arising from the employment relationship. The Ministry of Human Resources and Emiratisation (MoHRE) reviews such disputes and facilitates an amicable resolution.

Ministry's Final Judgment

The MoHRE can render a final judgment on disputes if the claim value does not exceed AED 50,000.00 or neither party complies with an amicable settlement decision.

Court of Appeals Involvement

If either party is dissatisfied with the Ministry’s decision, they may file a lawsuit with the relevant Court of Appeals within fifteen working days of notification. The Court of Appeals will review the decision, and its judgment will be final.

Referral to Competent Court

If attempts to reach an amicable settlement fail, the dispute will be referred to a competent court, along with a memorandum summarising the dispute, the parties’ arguments, and the Ministry’s recommendations.

Wage Provision During Disputes

During dispute resolution, the Ministry may order the employer to provide the worker’s wages for up to two months if the dispute results in the worker’s wages being withheld.

Collective Labour Disputes

If the Minister identifies an individual dispute with the potential to lead to a collective labour dispute detrimental to the public interest, additional administrative procedures or measures may be imposed on the establishment.

Efficient Court Proceedings

Upon receiving a request, the competent court must convene a hearing within three business days, notify the parties involved, and promptly adjudicate the case.

Rejection of Non-Compliant Applications

The competent court will reject applications that do not follow the outlined procedures.

Time Limit for Lawsuits

Lawsuits regarding rights protected by this Decree-Law cannot be heard if filed more than one year after the maturity date of the right subject to the lawsuit.

How TME Services can support your business through the UAE Employment Law

The Federal Decree Law No. (20) of 2023 marks a significant milestone in the evolution of employment law in the UAE. By refining the mechanisms for dispute resolution and clarifying the roles of key entities like the MoHRE and the Court of Appeals, this legislation is poised to create a more balanced and efficient framework for managing employment relationships. These amendments represent a forward-thinking approach to fostering a harmonious work environment that protects employers’ and employees’ rights and interests.

 

As the UAE continues to grow as a global business hub, these changes are timely, ensuring that the nation’s employment laws evolve with its dynamic economic landscape. For businesses operating in the UAE, staying abreast of these changes is crucial for compliance and maintaining healthy employment relations.

TME Services is a team of 45 professionals in legal-, tax-, accounting and compliance with over 18 years of experience. We advised a significant number of SMEs in the context of the implementation of the tax framework in the UAE and KSA over the last decade to make sure that our clients are well-oriented in the new and fast-evolving tax landscape and to reduce the legal liability of managers which may arise in connection with non-compliance.

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