In ruling upon an action initially filed before the Abu Dhabi Court, the Court of Cassation held that pursuant to a Fatwa issued from the Fatwa and Legislation Department, private establishments contributing to public welfare are deemed to be considered as private establishments and thus subject to private law; specifically, to Federal Law No.8 of 1980 ("Labor Law"). The Court of Cassation also held that:

  • The money held by these establishments does not have the characteristics of "Public Money" as defined in the Administrative Law; and
  • That the employees of these establishments are not considered as public employees.

Claim

An administrative action was filed by an employee ("the Claimant") against two quasi-governmental companies ("the Defendants"). The Claimant requested that the Court, on an urgent basis, do the following:

  • Stay the execution of a management/administrative decision ("the Decision") issued on 24th July 2008. The effect of the Decision was to terminate the Claimant's service with immediate impact;
  • To reinstate him to his former position and pay grade; and
  • To pay all his salaries and dues.

The Claimant also requested the cancellation of the Decision in addition to compensation for the moral damages suffered as a result of the arbitrary decision and his legal costs.

Court of First Instance

The Court of First Instance accepted the Claimant's claim and ruled in his favor. The Court cancelled the Decision and ordered the Defendants to reinstate the Claimant to his position of employment. The Defendants were also ordered to pay the Claimant's legal costs, plus a monthly salary of AED 15,465, with such salary to be paid on a monthly basis from 1st August 2008 until the Claimant's resumption of office. The Defendants appealed the decision.

Court of Appeal

The Court of Appeal cancelled the decision of the Court of First Instance and rejected/dismissed the case. Consequently, the Claimant appealed to the Court of Cassation.

Court of Cassation

The Claimant argued that the Court of Appeal had erred in its decision to reverse the lower Court's decision. The main grounds of the Claimant's appeal were as follows:

  • That the Claimant was working for the First Defendant as Head of Marketing until the issuance of the Decision;
  • That the Defendants are quasi-governmental entities, meaning the Claimant should be classified as a public servant. The Claimant argued that his relationship with both Defendants was governed by the Abu Dhabi Civil Service Law No. 1 of 2006, and that none of the termination conditions stipulated in that Law were applicable to his case;
  • That in relation to the classification of the Claimant's relationship with the Defendants, the conclusions reached by the Court-appointed expert complied with the facts and documents presented;
  • That the Claimant's refusal to sign a new contract regulated by the Labor Law was not a valid reason to terminate his existing contract.

The Court of Cassation rejected the Claimant's arguments. The Court held that pursuant to a Fatwa issued from the Fatwa and Legislation Department, private establishments contributing to public welfare are deemed to be considered as private establishments and are thus subject to the private law, including the Labour Law. The Court further held that although these establishments are charged with running and/or managing public administration and with providing a public service and enjoy an independent legal personality in addition to certain privileges granted only to public authorities, monies held by them do not attract the characteristics of "Public Money" as defined in the Administrative Law, and further, their employees are not considered as public employees.

Further, the Court of Cassation held that it was clear from both the papers filed in the proceedings and the First Defendant's Articles of Incorporation that the First Defendant was a PJSC. The First Defendant could therefore be classified as a private company and subject to the Labor Law.

The Court also held that the validity of the Decision should be determined by reference to the Labor Law. The result of this finding was that prior to filing his case in Court, the Claimant should have followed the procedures stipulated by Article 6 of the Labor Law in that the Claimant should have initially referred his dispute to the Labor Department for an attempt at amicable settlement.

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