Dubai judge says Labour Court will freeze employers' assets for failure to pay wages

Companies urged to pay on time and work with officials if they run into financial trouble

Dubai Courts has been enforcing the Wage Protection System with significant success. Getty Images

A senior judge has warned companies that fail to pay workers on time that they will have their assets frozen.

The message comes after the government said on Monday that employers must pay staff on time and in full.

A new legal provision allows courts to freeze the bank accounts and assets of companies in cases involving unpaid wages of more than 100 workers.

Dubai Courts has been enforcing the law with significant success.

“The move ensures that the property and funds of a company being pursued are frozen,” Chief Justice Jamal Al Jaberi, head of the Labour Court at Dubai Courts, told The National.

Once the Labour Court issues a verdict, the company’s assets may be auctioned off to settle the amount due to workers.

“When the [Covid-19] outbreak first happened, cases involving a large number of labourers increased while the number of individual cases fell,” Mr Al Jaberi said.

“The implementation of the provision and the efforts of all relevant departments led to an overall decline in the number of labour cases last year.”

He said these departments include Dubai Courts, the Permanent Committee of Labour Affairs in Dubai, the Ministry of Human Resources and Emiratisation, and the General Department of Human Rights at Dubai Police, among others.

In the last quarter of 2021, a large group of workers filed a case seeking unpaid salaries after the owner of their company fled the country.

“We immediately ordered a freezing of the company’s funds with help from the execution court,” Mr Al Jaberi said.

Before the provision came into force, owners could sell their company’s assets while a court case was continuing, the judge said. There were occasions when no funds could be found to pay the workers’ dues once the court issued a verdict, he said.

The new law helps to avoid such situations.

After a ruling from the court in favour of the workers in the 2021 case, the court ordered that the company’s assets be auctioned to pay the workers' dues and enable them to return to their countries of origin.

The senior judge said that, in general, more than 90 per cent of labour cases are about unpaid wages.

He urged employers to adhere to laws and ministerial decisions. This, he said, would help prevent companies facing financial problems from landing in court over claims of unpaid wages.

“Flouting employment contracts conditions, particularly on salaries, is the main reason behind labour cases being filed,” he said.

“I urge companies to pay salaries on time and in the case they are facing financial difficulties, there are ways to help them avoid developing these difficulties into court cases.”

He said laws and government decisions allow changes to contracts based on mutual consent.

“They can agree to a change of wage with the employee but must document that because a court of law will only consider documents.”

On Monday, the Ministry of Human Resources and Emiratisation urged private companies to pay wages on time using the Wage Protection System.

All companies and businesses registered with the ministry must sign up with the WPS and those that fail to will be blocked from all new work permits until salaries are fully paid.

Maher Al Obed, assistant undersecretary at the ministry, said any change in salaries should be done through the approved system.

He said employers can also use the 'statement of account' service for salary transfers, which is emailed every month.

During the first six months of last year, Dubai Labour Court dealt with 6,407 labour cases.

In 2020, it heard 14,703 cases, down from 15,311 the year before.

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