Imagine working for eight months at a prestigious company, earning a handsome monthly salary of AED 40,000, only to receive an abrupt email one day terminating your employment. Then, when you seek justice for unpaid wages, your former employer argues that you were never legally an “employee” at all because you lacked a work permit. Should this technicality deny you access to the courts?
This was precisely the scenario that unfolded in a recent high-stakes legal battle that wound its way through the UAE judicial system, culminating in a landmark ruling by the Abu Dhabi Court of Cassation in June 2025.
“You Don’t Exist”: The Company’s Bold Defense Strategy
When the employee in this case filed his claim seeking nearly half a million dirhams in unpaid wages and compensation, the company’s defense was audacious in its simplicity: “The Labor Court has no jurisdiction because this person is not legally a worker.”
It was a clever legal maneuver that initially succeeded at the appellate level. The Court of Appeal agreed, ruling that without an official work permit, the claimant could not be classified as a “worker” under labor law, thus removing the case from the Labor Court’s jurisdiction.
The message was chilling: No permit, no protection.
The Digital Paper Trail
What made this case particularly interesting was the substantial evidence of an employment relationship, despite the lack of formal documentation. The employee had preserved:
- An email termination notice on company letterhead
- A company salary sheet with the owner’s signature
- A payment voucher for AED 40,000
- The company communications list him as a sector leader
- WhatsApp conversations with company management
In the digital age, employment relationships leave electronic footprints that can be difficult to erase—a fact that would prove crucial to the case’s outcome.
The Court’s Surprising “Yes, But…” Decision
The Court of Cassation ultimately delivered a nuanced ruling that surprised legal observers with its balanced approach. In essence, the Court said:
- Yes, the Labor Court has jurisdiction over all employment disputes, even when the worker lacks proper authorization
- But no, labor law doesn’t apply to these unauthorized relationships
- Instead, civil law principles govern these employment arrangements
“The Door Remains Open”: Why This Matters
The implications of this ruling extend far beyond the AED 332,000 at stake in this particular case. The decision effectively declares that:
- No employment relationship exists in a legal vacuum, even if it operates outside regulatory frameworks
- Companies cannot use the lack of permits as a shield against all liability
- Workers retain basic rights to judicial remedies, even without formal authorization
- Labor Courts remain the appropriate forum for employment disputes of all kinds
The Legal Tightrope: Balancing Regulation and Reality
The brilliance of the Court’s approach lies in how it walks a delicate line between upholding the regulatory system and addressing real-world complexities.
By ruling that civil law—rather than labor law—applies to unauthorized employment relationships, the Court maintained the incentive for proper compliance with work permit requirements. Unauthorized workers cannot access the special protections of labor legislation.
Yet by keeping these cases within the Labor Court’s jurisdiction, the Court ensured that specialized judges with expertise in employment matters would still hear these disputes, and workers would not face procedural obstacles in accessing justice.
Practical Takeaways
For employers, the message is clear: Employing workers without proper permits does not place you beyond the reach of the law. While the relationship won’t be governed by labor law, civil law principles of contracts and obligations will still apply, and you’ll still face the Labor Court.
For employees, the ruling offers a mixed bag. Working without proper authorization still means forfeiting the special protections of labor law. However, the door to justice remains open through civil law remedies in the Labor Court.
The UAE Court of Cassation’s approach demonstrates judicial pragmatism—recognizing irregular employment relationships without fully legitimizing them, providing access to justice while maintaining regulatory incentives.
What Happens Next?
The Court of Cassation sent the case back to the Court of Appeal with instructions to apply civil law principles rather than labor law. The ultimate outcome for the specific parties remains to be seen, but the legal principle is now established: unauthorized employment exists in a civil law framework, adjudicated by Labor Courts.
For the thousands of workers in the UAE without proper documentation, this ruling provides a pathway to justice that didn’t clearly exist before. For employers, it’s a reminder that all employment relationships—authorized or not—carry legal obligations that courts will enforce.
Having said that, contact Khairallah Advocates & Legal Consultants and benefit from our free 30-min legal consultation.
*Disclaimer: our blogs, law updates, and FAQ’s are freely distributed for educational purposes and to showcase recent updates and regulations in the UAE’s framework.
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