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Dubai Labour Court's Landmark Verdict Exposes Employer Malpractice

NYK Law Firm successfully represented the plaintiff in a Labour dispute lawsuit

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Staff Writer, TLR

Published on April 13, 2024, 12:57:40

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significant development realm employee rights Dubai Labour Court recently

In a significant development in the realm of employee rights, the Dubai Labour Court recently delivered a groundbreaking verdict against malpractices by a UAE Real Estate Company. The ruling sets a crucial precedent aimed at curbing the exploitation of employees within the real estate sector.

The case centered on the employment dispute between an Employee and two affiliated Real Estate Brokerage Companies, highlighting the all-too-common issue of employers withholding rightful commissions from their employees. The Hon’ble Labour Court of Dubai's decision not only affirmed the employee's rights but also underscored the importance of upholding the UAE Labour Law.

Background

The Employee was issued an offer letter from Company A, which is a Real Estate Brokerage Company. Company A delayed the execution of the MOHRE Employment Contract for almost 3 months citing reasons that Company B, shall be acquiring Company A very soon. It was represented that Company B shall perform all MOHRE-related compliance to avoid duplicity and to cut expenses.

Both companies agreed to provide a 5% commission on deals closed by the employee. However, just before settling the commission, Company B terminated the employee without notice, denying any affiliation with Company A.

This move, three months post-MOHRE Contract execution, rendered the employee ineligible for entitlements under UAE Labour Law.

During the employee's tenure with both companies, they successfully closed several real estate deals, entitling them to AED 96,000 in total, including end-of-service benefits and accrued commissions.

Legal Proceedings

Represented by NYK Law Firm, the Employee contested the denial of entitlements, citing common employer tactics of transferring employment between affiliated companies to evade payment obligations.

The Hon’ble Court appointed a Management and Accounting Expert to investigate, confirming the validity and continuity of the employment relationship and endorsing the employee's entitlements from the date of joining till termination.

Ruling

In a landmark judgment, the Hon’ble Court ordered both companies to settle the full claim amount, encompassing commissions and employment entitlements, underscoring the legal responsibility of employers to honour their commitments to employees.

Conclusion

This ruling serves as a wake-up call for employers engaging in similar misconduct, underscoring the urgent need for greater scrutiny and enforcement by employers.

It highlights the vulnerable position of employees and reaffirms the judiciary's commitment to upholding labour rights and holding unscrupulous employers accountable for their actions.

In essence, the Dubai Labour Court's verdict stands as a beacon of hope for employees, signalling a shift towards greater transparency and fairness in the workplace, while simultaneously exposing and condemning the malafide intentions of certain employers.

(The writer is a legal associate at NYK Law Firm, one of the top legal consultants in Dubai)

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