Multi-jurisdictional UAE ‘a challenge’ to firms resolving employment disputes

Defending employment claims is Dubai can be costly if you're not familiar with the court system in the region. That was the message to companies based there from Luke Tapp back in July as Covid-19 was spreading quickly in the region hitting businesses badly and, in turn, affecting employment relationships. The result? A noticeable rise in employment litigation and problems for companies unfamiliar with way disputes are managed in the region. So let's shed some light on that. In his Outlaw article he describes how, when a complaint from an employee is not resolved and they bring a formal claim, the procedure that follows depends on a number of variables, one of which is the region wherethe employer is located. So what does that mean exactly? I had the opportunity to put that question to Luke who joined me by video link from Dubai: 

Luke Tapp: "In the UAE there are three jurisdictions that are applicable to employment disputes depending on where the UAE entity is incorporated. So there are two jurisdictions that are very similar. One is called the ADGM free zone, the other is the DIFC free zones, and they're the two financial free zones that are in Abu Dhabi and Dubai respectively and those free zones are different all of the other free zones and the onshore mainland area because they are common law jurisdictions with their own independent court systems and their own independent employment laws. So when a client of ours is incorporated in either of those free zones and there's an employment dispute those disputes are dealt with within those courts, which follows a common law system, follows the employment laws that are applicable to those free zones only. The third jurisdiction is what's applicable to all other companies that are incorporated in the UAE. So a lot of our clients are incorporated in this third jurisdiction for the purpose of employment disputes. So whether you're in the onshore mainland area, or you're in any of the free zones, other than the DIFC and ADGM, and you find yourself within an employment dispute, those disputes will be escalated to the local courts of the Emirate in which you incorporated in so if you're in Abu Dhabi, it's the local courts of Abu Dhabi, if you're in Dubai, it's the local courts of Dubai, and the same for all of the other Emirates within the UAE. Those are civil law jurisdictions that follow the UAE labour law number 8 of 1980. So they're a different system to the DIFC and the ADGM, they have a different approach, a different court process and whereas as DIFC and AGDM are English speaking courts, the onshore mainland courts are Arabic speaking, so all of the documentation, all of the evidence, all of the pleadings need to be translated into Arabic, in order to be submitted before the courts."

Joe Glavina: "Tell me about the legal rules because I gather they are very different too. Things like the burden of proof, the 'without prejudice' rule, case law which binds judges and so on – all very different?

Luke Tapp: "Yes, great question Joe and I think that's such an important practical point for clients to be aware of, you know, we're, we're one of the largest international law firms, one of the largest UK law firms in the Middle East and so a lot of our client base comes from outside of the Middle East. We work with a lot of international clients based in the UK, the US and Europe and, of course, it's s a time where they do feel a bit nervous entering a new jurisdiction but the good thing about Pinsent Masons in the Middle East is that we're a full service office. So we have the employment specialists, we have corporate specialists, commercial specialists, dispute specialists, and we have a whole range of diverse lawyers that are based within our Dubai office that come from all parts of the world and so we're really able to give clients that full service when they are starting to enter a jurisdiction, whether it's how do you incorporate an entity? How do you draft an employment contract? What happens if we get into a dispute with one of our local contractors, and it's not just UK qualified lawyers that work in the Dubai office, we have Middle East qualified lawyers, we have Arabic speaking lawyers, we have lawyers who appear before the local courts as well. So we know where the risk areas are for international clients, we know how to mitigate those risks when they're first entering into the jurisdiction so we absolutely hold our client's hand throughout that process and if there are any difficulties, if they come across any obstacles in that initial incorporation, or if they enter into a situation where there's a bit of a contentious dispute, we have a strong local disputes team that's there to support them. So I think that's one of the real strengths that we have at Pinsent Masons in the Middle East, that we do offer that full service with a with a range of skill sets within the Dubai office."

Luke's guide 'Employment disputes in Dubai and the DIFC courts' can be found on the Outlaw website, along with the latest news and developments from that region.