Court stands by staff, rejects firm's arbitration plea

The Dubai Court of Cassation refused to refer the arbitration appeal of a company against one of its employees despite the existence of the arbitration clause in the terms of the contract.

The court ruled to reject the arbitration clause that is contrary to the Labour Code, as it is not in favour of the employee.

The court confirmed in its new legal principle that any term in the contract that violates the law of work and is not in the interest of the employee is considered void even if the worker were to sign a contract inclusive of such terms.

The court also confirmed that the lawmaker has been targeted from the (nullity) to protect the private interests of workers and then invalidate any contract of employment including unfair conditions to the worker, as well as invalidate any reconciliation which is not in the favour of the employees.

The new legal principles was established when the court was considering the case of an Executive Director of a company who had filed a lawsuit against his company asking the court to oblige it to pay him Dh405,000.

He said in his lawsuit that he joined the company to work for a salary of Dh180,000 a year. But after three years he was surprised of to learn that he was being terminated and the company was refraining from paying his dues.

Earlier, the Court of First Instance dismissed the case for the existence of the arbitration clause, but the Executive Director appealed this ruling.

Then the Court of Appeal ruled to cancel the appellant and ruled for the plaintiff to compel the company to pay his dues.

The company appealed this ruling before the Appellate Court, which asked to cancel the verdict and activate the arbitration clause, but the Court of Cassation issued a verdict of rejecting the appeal of the company.

The Court of Cassation confirmed in its ruling that Article 7 of the Labour Code overturned every condition that violates the law of work unless it is more beneficial to the worker, and that the arbitration clause in a contract of employment is not in favour of the labourer.

The court said: "Article 5 of the Labour Code provides for exemption from serving fees and expenses in all stages of litigation, as opposed to arbitration, which requires the labourer to pay fees of the arbitrators and expenses of arbitration."

The court explained that "Article 6 of the Labour Code stipulates that the dispute between the employer and the worker should be considered before the competent Labour Department at first. And only in case it is difficult to reach to a settlement should the disputes be reffered to the competent courts.

It confirmed that all of these legal rules established under the Labour Code on the rights of workers and is not permissible for individuals.


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