Jurisdiction of Labor Court vs. Applicable Law for Undocumented Workers

The Abu Dhabi Court of Cassation addressed a critical distinction between the jurisdiction of the Labor Court and the substantive law applicable to employment disputes where the employee lacks a formal work permit.

📋 Case Background

The plaintiff (appellant) filed a labor case (No. 181/2025) against his employer (respondent), claiming unpaid wages of AED 400,000, notice period pay of AED 40,000, and compensation for arbitrary dismissal of AED 120,000. He stated he worked from May 31, 2024, to January 8, 2025.

The Court of First Instance partially ruled in his favor, awarding him AED 292,000 in late wages and AED 40,000 for the notice period. However, the employer appealed (Appeal No. 137/2025). On May 14, 2025, the Court of Appeal overturned the initial judgment, ruling that the Labor Court lacked jurisdiction because the employee did not have a work permit from the Ministry of Human Resources and Emiratisation (MOHRE), which, in its view, deprived him of the legal status of a 'worker'.

🔍 Appellant's Argument before the Court of Cassation

The appellant contested the appeal judgment, arguing that the existence of an employment relationship was proven by evidence such as termination emails, salary statements, and business communications. He contended that under Article 8/2 of Federal Decree-Law No. 33/2021 on the Regulation of Labor Relations, an employment relationship can be proven by all means of evidence, thus affirming the Labor Court's jurisdiction.

⚖️ Court of Cassation's Legal Analysis and Findings

On the Jurisdiction of the Labor Court

The Court of Cassation found the appeal judgment's ruling on jurisdiction to be erroneous. It cited Decision No. 18 of 2025 by the Chairman of the Abu Dhabi Judicial Department, which grants the Abu Dhabi Labor Court comprehensive jurisdiction over all labor disputes. This includes cases where the employing entity is not registered with MOHRE. Therefore, the Labor Court was indeed competent to hear the case.

On the Applicable Substantive Law

Despite affirming jurisdiction, the Court clarified that the applicable law is a separate issue. It held that Federal Decree-Law No. 33/2021 explicitly requires a worker to obtain a permit before commencing work. The failure to secure this permit means the employee cannot benefit from the specific protections and guarantees afforded by the Labor Law.

Consequently, while the Labor Court has jurisdiction to hear the dispute, the legal relationship between the parties falls outside the scope of Labor Law and must be governed by the principles of the Civil Law. The Court of Appeal erred by dismissing the case for lack of jurisdiction instead of applying the correct legal framework.

⚡ The Verdict

The Court of Cassation ruled as follows:

• 1. Cassation: The appealed judgment from the Court of Appeal is fully cassated (overturned).

• 2. Jurisdiction Confirmed: The Labor Court is competent to hear the case.

• 3. Remand: The case (Appeal No. 137/2025) is remanded to the Court of Appeal to be decided on its merits based on the provisions of the Civil Law, not the Labor Law.

• 4. Fees: The appellant is required to pay the court fees applicable to a civil lawsuit.

• 5. Costs: The respondent is ordered to pay the cassation court costs and AED 1,000 in attorney's fees.