Cracking the code: UAE Labour Courts explained

All labour or employment claims of the private sector in the UAE, including its numerous free zones (except for those employees based within Dubai International Financial Centre and the Abu Dhabi Global Market), are governed by the UAE Federal Decree Law No. 33 of 2021 (as amended), its accompanying Cabinet Resolution No 1 of 2022 on the Implementing Regulation of Federal Decree Law No 33 of 2021 (Executive Regulations) (together the Labour Law) and various ministerial resolutions and decrees.

All employment and labour related claims are heard before the UAE’s Labour Courts.

Claims must be brought within 2 years of the date the entitlement became due. In practice this is generally the termination date of the employment.  Where an employee fails to raise a claim within the 2-year time period, the court may at its discretion agree to hear the claim, however, generally the time bar is strictly enforced by the court.

Before filing a formal employment litigation claim before the labour court, all claimants, or any person representing the claimant, must file a complaint with the Ministry of Human Resources and Emiratisation (MOHRE) or the relevant free zone authority in which the claimant was employed. The MOHRE or relevant free zone authority will attempt to mediate between the parties and organise a mediation meeting to resolve the dispute. In the event a settlement is not reached within 14 calendar days of the complaint being filed, the MOHRE will issue the Claimant with a no objection letter and refer the dispute to the Labour Court.

Important issues to be considered regarding the litigation process are:

• The language that proceedings are conducted in. Proceedings are conducted entirely in Arabic. All documents submitted to support the claim or defence must be translated into Arabic by a translator approved by the Ministry of Justice. Only UAE nationals (and a few other Arab nationalities) currently have rights of audience before the Labour Court. Parties can act in person if they wish to, although this is limited to proceedings within the Court of First Instance.
• How hearings and adjournments are managed. A “hearing” in the Labor Court is an appointment at which the parties' written submissions are submitted and future hearing dates fixed. An "adjournment" is the period between each hearing, during which one or both parties are usually required to prepare submissions or arrange for the translation of documents to be submitted.
• What are memoranda. A "memorandum" is the submission of a party to the claim, akin to a pleading. The claimant initially submits his memorandum of the claim, and the defendant thereafter submits his memorandum of the defence in reply. Each party can then submit further memoranda in response to the other party's prior memoranda and submitted documents. This exchange continues until the Labour Court is of the opinion that all heads of claim have been sufficiently argued, and it reserves the matter for judgment.

It is necessary to be aware of:

• The rules of evidence. The Labour Court (in common with the other civil courts in the UAE) generally only accepts written documentary evidence in support of a party’s memorandum. They do not accept written witness evidence in support of a party’s claim or defence. Where a party is unable to prove or defend a particular point, that party may request that the judge hear oral testimony from a witness. A judge has the absolute discretion to call a witness and where this discretion is exercised, only the judge can examine the witness, and can ask any questions they deem appropriate. Neither party has the right to examine or cross examine the witness.
• Whether there is a duty of disclosure and discovery of documents. There is no duty of full disclosure in the Labour Court. Documents not supporting a party’s position need not be disclosed unless the other party is aware of the existence of a specific document and makes an application to the Labour Court for specific disclosure. However, if a party fails to disclose a conclusive document i.e. a document providing conclusive evidence that could decide the case, and this becomes known to the court or opponent, a criminal claim can be brought against the offending party. In the event the conclusive document is discovered by the opponent after the judgment has been given, the opponent can apply to the same court to have the judgment revised and reissued.
• When an expert can be appointed. If the Labour Court considers that an issue is complicated or requires detailed review (for example, the calculation of an annual bonus), it may appoint an expert to investigate that aspect of a claim. The expert is chosen from a panel maintained by the Labour Court and is provided with a remit and scope of the required investigation. The expert has wide investigative powers and can request documents and interview witnesses, as well as attend the employer’s offices to review any personnel files and policies relating to the claim. The expert prepares and submits a report of his findings. Both parties can comment on the report filed. However, in most cases, the Labour Court adopts the expert's report in its judgment.

In Dubai, all hearings are now conducted virtually. Parties can request for the hearings to be in-person however such requests are often denied unless the case relates to a marriage dispute. Other emirates operate a hybrid system of virtual and in-person hearings. It is at the court’s discretion to decide which mode they use for each case.

Aside from being heard “virtually” rather than in-person, there are no other differences between a virtual hearing and an in-person one.

There is not much discussion during a hearing. Both parties submit their respective documents and, if the matter is clear to the judge and he/she has all the documents that they need, they may reserve the matter for judgment immediately.

Alternatively, the judge may seek to clarify certain points by asking the parties questions and ensuring that the correct documents have been submitted. If the parties wish to respond to anything mentioned in the hearing, they may do so by requesting an adjournment and, if granted, submitting a memorandum before the next scheduled hearing.

Once the judge reserves the matter for judgment, a final hearing will be scheduled in which the judge will give their oral and written decision.

There is no minimum or maximum time scheduled for a hearing. It can last a little as 1 minute or, if it is a particularly complex matter with many documents, as long as a few hours.

Judgment in the Court of First Instance can be as quick as 6 weeks, however, 3 to 6 months is more usual. Where a matter is particularly complex and an expert is appointed, it can take 12 months or more.

A written and oral judgment will be handed down in Arabic on the day of the final hearing. The judgment will be made public, as will the names of the parties, and accessible from the court website.

Where the value of the claim is less than AED 10 million, 1 judge will preside over the matter. However as mentioned above, if the case is particularly complicated, an expert can be appointed to assist the judge.

Where the value of the claim exceeds AED 10 million, 3 judges will be appointed. Experts can also be called to assist in these cases.

Recently, the MOHRE was granted authority to make a final decision in labour disputes where the value of the claim is less than AED 50,000; or whereby either party fails to comply with an amicable settlement decision approved by MOHRE at the mediation stage, regardless of the value of the claim.

Either party can challenge the MOHRE's decision and file a further claim before the Labour Court of First Instance by lodging an appeal to the Court of First Instance within 15 working days following notification of the decision. The Court of First Instance will schedule a hearing to consider the case within 3 working days and issue a final determination within 30 working days of the filing date.

The resolution provides that final decisions by the MOHRE shall be "annotated with execution in accordance with customary practice". However, it remains unclear in practice how final decisions from the MOHRE will be enforced through the usual execution procedure given MOHRE's lack of judicial authority.

Either party can appeal the judgment (subject to minimum quantum) by making an appeal application to the court and submitting a statement of claim and memorandum with supporting documents. As with the initial claim, the aforementioned documents may be submitted in hardcopy to a typing centre or uploaded onto the court system. The parties have 30 calendar days from the date the day after the judgment was handed down from the Labour Court to file an appeal. In the absence of an appeal, the Court of First Instance judgment becomes final, and the winning party can open an “execution file”. If an appeal is filed, the Court of Appeal proceeds in the same manner as the litigation with exchanges of memoranda until the Court of Appeal judgment is issued. The memorandum should include detailed grounds of appeal. The grounds need not be limited to matters of law.

It is important to note that, where the claimant is the appellant, the Court of Appeal judge cannot award him/her less than what he/she was awarded at the Court of First Instance even if the judge disagrees with the awarded amount. However, if the defendant is the appellant, the judge can reduce the amount awarded to the claimant.   

The parties have 60 calendar days from the date the day after of the judgment of the Court of Appeal is handed down to appeal to the Court of Cassation.

For cases worth more than AED 500,000, the decision can be appealed to the Court of Cassation where generally 3 - 5 judges will preside over the matter. The Court of Cassation proceeds in the same manner as the litigation in the Court of Appeal where an appeal application is made, statement of claim submitted, and memoranda exchanged until the judgment is issued. At the Court of Cassation, the grounds of appeal are limited to matters of law.

Parties may be represented by a registered UAE national (and a few other Arab nationalities) or by a family member up to the fourth degree. Managers of companies may also appoint a member of staff to represent the company in court. All representatives must have power of attorney attested by the notary public. Parties can also represent themselves – this is particularly common for employees - in the Court of First Instance and the Court of Appeal but not in the Court of Cassation.

The main issues to be aware of in relation to costs and judgments are:

• The party responsible for costs and fees. Each party is responsible for their own legal costs as well as disbursements, which are not recoverable by a winning party, except for a small nominal amount awarded towards legal costs at the final hearing to the winning party.
• Court fees are 5% of the total claim amount (subject to a maximum of AED 20,000). A respondent employer must pay the court fees regardless of the outcome of any claim. Employees and their heirs will be exempt from paying court fees at all stages of litigation and execution for claims less than AED 100,000. For claims more than AED 100,000 both the employee and the employer will be expected to pay 5% of the total claim amount. The employee can make a request to the court to delay payment of court fees until final judgment is given. In the event permission is granted, the court will deduct these fees from the amount awarded to the employee in the judgment.
• Expert fees are usually paid by the claimant, although the Labour Court may require the parties to pay these fees jointly.
• Interest may be awarded on any judgment amount, at the Labour Court’s discretion, and this is generally 5%.
• The length of the process. Judgment in the Court of First Instance can be as quick as 6 weeks, however, 3 to 6 months is more usual. Where a matter is more complex and an expert is appointed, it can take 12 months or more.
• How judgments are delivered. A brief verbal summary of the judgment is provided first, and the detailed written judgment is provided later.