In this article, we would like to share some important updates regarding recent changes in the UAE labor dispute resolution process through Federal Decree-Law No. 20 of 2023, effective 01.01.2024. This introduces significant adjustments, placing the Ministry of Human Resources and Emiratization (MOHRE) in a central role.
MOHRE’s New Role in Adjudication
MOHRE’s function has evolved from a mediator to the final judge and arbitrator for employment disputes below AED 50,000. This alteration aims to streamline and expedite the resolution of more minor disputes.
Legal Weight to MOHRE’s Decisions
MOHRE’s decisions now carry the same legal weight as judgments from local courts, allowing for enforcement. This marks a departure from its previous role centered on mediation.
Introducing the Appeal Mechanism
To maintain accountability, the Decree introduces an appeal process. Dissatisfied parties can appeal MOHRE’s decisions directly to the Court of Appeal within 15 days, suspending execution until a judgment is issued.
Threshold
MOHRE distinguishes between disputes above and below AED 50,000 and retains its traditional mediation role for disputes exceeding this threshold.
Financial Support and Preventive Measures
Acknowledging financial concerns during disputes, MOHRE can now require employers to continue salary payments for up to two months during salary suspension. Additionally, the Minister can issue measures preventing individual disputes from escalating into more significant conflicts, protecting the public interest.
Addressing Implementation Challenges
With the Decree effective from January 1, 2024, there are challenges in the absence of detailed procedural guidelines. The key concerns are establishing mechanisms for a fair adversarial process and uncertainties around legal representation.
How TME Services can support your business through the UAE Employment Law
As the UAE refines its labor dispute resolution approach, employers and employees should be prepared for a more efficient process, especially for lower-value disputes. Stay tuned for further updates on these changes.
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.
