The Appellant brought Abu Dhabi Administrative Action No.
1879-2007 (Full Bench) against the Respondents seeking a stay of
enforcement and cancellation of an appealed decision requiring the
Appellant's retirement before the legal retirement age. In
addition, an order declaring the decision null and void and
directing that the Appellant be reinstated to his former position
in the same grade and salary was sought. Material and moral damages
plus costs were also sought from the First Defendant.
It is contended that the Grand Mills for Flour & Feed Company,
where the Appellant was employed as a Business Development Manager,
had retired him from service with effect from 1st April 2007 even
though he had not reached legal retirement age.
The Court of First Instance dismissed the request for stay of
enforcement and appointed an expert. At a hearing on 24th June
2008, the Court ordered that the Appellant be reinstated to his
former position. The First Defendant was ordered to pay the
Appellant his monthly salary of AED 33,175 from 1st April 2007
until the date of his return to work. All other claims were. The
Respondent companies did not accept the decision and lodged an
appeal. At a hearing on 26th May 2009, the Abu Dhabi Federal Court
of Appeal decided on the merits to reverse the appealed decision
and dismiss the action. The Appellant consequently appealed.
The Appellant appealed on four grounds, but essentially submitted
that the Court had erred in law by dismissing the action on the
basis that First Respondent was a public joint stock company whose
employees, including the Appellant, were not public servants, and
that the Appellant's relationship to the Company was an
employment relationship subject to the Federal Labour Law. The
Appellant had failed to lodge his claims with the Ministry of
Labour. The Appellant contended that his relationship with the
Respondent was governed by Abu Dhabi Civil Service Law No. 1 of
2006, under which no grounds for termination were prescribed.
Finally, the Appellant argued that the Court appointed expert had
drawn sound conclusions based on the facts and evidence, which the
lower Court had ignored.
It was held that the Appellant's arguments were not well
founded. The Articles of Association of the Respondent companies
required that they take the form of a joint stock company in all
circumstances. Further, the Articles of Association stipulate that
the Commercial Company Law shall apply in the absence of specific
provision or the existence of contrary provision in the Articles.
This means that both companies are commercial companies and
subjects of private law in all matters involving their corporate
personality, rights, obligations, business and relations with both
third parties and their own staff. As such, they are not government
agencies, public bodies or corporations, and their staff are not
public servants. Accordingly, the Appellant, an employee of the
First Respondent, is not a public servant and his relationship to
Respondent companies is not subject to the Abu Dhabi Civil Service
Law No. 1 of 2006 but to the provisions of Federal Law No. 8 of
1980 regulating labour relations. It is settled by this Court that
litigation is part of public policy and should be instituted
pursuant to the filing procedure prescribed by law. Article 6 of
Federal Law No. 8 of 1980 states that an employer, worker or
beneficiary who has a dispute over any of his rights under the Law
should file an application with the competent Labour Department for
amicable settlement of the matter. If no amicable settlement can be
reached, said Labour Department would then refer the matter to the
competent court. Failure to follow this procedure would render such
legal action inadmissible. In the present action, the Appellant
sought cancellation of the First Respondent's decision to
retire him before the legal retirement age. Accordingly, the relief
is being sought on the basis of a claimed breach of the employment
contract between the parties (and Labour Law No. 8 of 1980).
Therefore, the dispute should have, in the first instance, been
referred to the Labour Department. There was nothing on the record
which indicated that the Appellant had approached the Department in
question prior to filing his present action. The Appellant's
failure to first submit his grievance to the Labour Department
rendered his Court action inadmissible. Accordingly, the higher
Court held that the lower Court's decision that the
Appellant's action should not be entertained was correct.
In light of the above, the Court dismissed the appeal with costs
and awarded AED2,000 in advocate's fees to Respondents.
Comment
The main principle arising from this judgment is that
Companies owned by the State or a Member Emirate of the Federation
and licenced under the Commercial Company Law are commercial
companies whose staff are subject to the Labour Law and not the
Civil Service Law.
Article 70 of the Commercial Company Law (Law No. 8 of 1984) allows
the Federal Government and the Governments of the Member Emirates
of the Federation to set up public joint stock companies alone or
in partnership with any number of persons below ten.
Article 73 of said Law requires the founders of a joint stock
company to draft memorandum and articles of association. When
companies are set up by the federal and local governments a law is
first issued setting up the company then its articles of
association are prepared and then the company is registered in the
Companies Register with the relevant authorities.
Based on the foregoing, the rules of commercial law apply to such
companies as commercial companies rather than government agencies
or public bodies or corporations and their commercial transactions
are governed by private law and their employees and workers by the
Labour Law.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.