UAE Labour Law’s two-year rule under spotlight in commission case

Question: I filed a case against my company because they refused to pay me the commission for a deal that was completed and closed in 2022. The First Instance Court awarded me the claimed amount. The company has appealed the judgment, claiming that I am not entitled to the commission due to the passage of more than two years. Is the company correct in this claim?

Answer: According to Article 54(9) of the Labour Law, amended by Federal Decree-Law No. 9 of 2024, which revises certain provisions of Federal Decree-Law No. 33 of 2021, “litigation concerning any rights accrued under this Decree-Law may not be considered after two years from the date of termination of employment.”

The plea that a claim for any rights arising under Federal Decree-Law No. 33 of 2021 cannot be heard after the lapse of two years from the due date, as stipulated in Article 54(9), is a substantive plea. It may be raised at any stage of the case, including for the first time before the Court of Appeal, unless it is proven to have been explicitly or implicitly waived.

Based on the above, and on Labour Cassation Court Ruling No. 146/2024 dated 17/12/2024, we can consider that a “commission,” as an employee right, is subject to the two-year limitation rule in Article 54. However, whether this plea applies is ultimately a matter for the court to decide.

The Cassation Ruling No. 146/2024 stated: “It was established that the appellant adhered to the defense of inadmissibility of the case and had not waived it explicitly or implicitly, as the company submitted to the court that the original case should not be heard regarding the commission due to the passage of time. If true, this would affect the court’s decision. The contested ruling ignored this argument, did not examine it, and issued its judgment regarding the commission without addressing it. Therefore, the ruling is flawed due to lack of reasoning and a violation of the appellant’s right to defense, necessitating its annulment.”