Tuesday, May 31, 2011

staff from Free zone can't move courts directly

Labour disputes in free zones should be first reported to the free zone authorities before moving the courts. In the event the free zone authority fails to reach a satisfactory settlement of the dispute, the case should then be referred to the Labour Court.

The Dubai Court of Cassation established the new legal principle while considering the appeal filed by an employee working in Jebel Ali Free Zone before the Labour Court to demanding his company pay him of Dh558,000 in dues.

The employee (plaintiff) said he had joined the company as Managing Director on Dh35,000 monthly salary. On his return from annual leave he was surprised to learn that a report of him having 'escaped' was issued by the company. He alleges the company took such a step to avoid paying him teh dues.

He said the dues include salary until the end of his contract which is about Dh345,000; compensation for unfair dismissal which is about Dh105,000; annual leave allowance Dh7,000 for the last two years; Dh73,000 as service bonus; and air ticket alowance Dh1,500.

The Court of First Instance refused to accept the case because he failed to present his complaint to Jebel Ali Free zone Authority first.

He then moved the Court of Appeal which again rejected the appeal and upheld the appellant.

But the employee was not satisfied with the verdict and moved the Court of Cassation which issued the new principles mentioned above.

The Court of Cassation said its ruling: “The legislator in the decree of establishing the authority of Jebel Ali Free Zone and its implementing regulations gave authority to the free zone of Jebel Ali (power and competence) to receive complaints and requests for workers and companies and institutions working in the geographical scope of the free zone of Jebel Ali of any legal disputes."

The court added also it has given the power to settle the dispute amicably, and in case the authority failed to reach a settlement, it is entitled to take the decision it deems appropriate, such as refer the case to the competent court.