Ras Al Khaimah Court of Cassation, Labour Appeal No. 148 of 11 JY, judgment of 29 December 2016
An employment contract is identified by subordination and wage, which distinguish a worker from a partner. A written contract can as a rule be shown to be sham only by writing, but where the sham conceals a fraud on the law it may be proved by any means. The trial court decides whether an employment relationship exists, but must base its finding on evidence in the file and address material evidence; holding that a worker was really a partner, and the licence holder merely a sponsor, while ignoring the licence holder's own admission that he employed him, is flawed reasoning.
The appellant sued the respondent establishment in the Ras Al Khaimah labour court in 2015 for AED 100,100 in employment entitlements, relying on a two-year employment contract running to 30 July 2015 that had been registered with the Ministry of Labour. The lower courts dismissed the claim. Relying on witnesses heard in a related misdemeanour case and at first instance, they found that the witnesses and the appellant were the real owners of the business, that the appellant held half and managed it alone, that the employment contract was absolutely sham and had been made only so that he could bring his family into the country, and that the licence holder was no more than a sponsor of the licence with no ownership interest. On appeal in cassation the Court restated that the test of an employment contract is subordination, the worker's subjection to the employer's supervision and direction, together with a wage, which distinguishes a worker from a partner. A party to a written contract can generally prove that it is sham only in writing, but where the sham is used to evade the law it can be proved by all means. The trial court may decide whether an employment relationship existed, but its finding must rest on evidence in the file and deal with material evidence. Here the Court of Appeal had not dealt with the licence holder's own statement to the Public Prosecution on 1 November 2015 that the appellant had worked for him in the mobile-phone shop he owned for four years as its manager on a monthly salary, and that no one else shared the shop with him, which contradicted his witnesses, nor with the appellant's salary receipt. The judgment was quashed for flawed inference and deficient reasoning and remitted.
The case sits at the meeting point of labour claims and informal ownership arrangements in onshore businesses. Courts will entertain arguments that a registered licence holder is only a sponsor and that the real owner is someone else, but a finding of that kind must rest on the evidence as a whole, including the licence holder's own admissions. Parties who document one arrangement and practise another bear the evidential risk.
| Article 1 of Federal Law No. 8 of 1980 (Labour Relations Law) Decided under this law; it has been replaced by UAE Labour Law. |
| Federal Law No. 10 of 1992 (Evidence Law) Decided under this law; it has been replaced by Evidence Law. |
“صورية. عقد "عقد العمل ". عمال. محكمة الموضوع "سلطتها في فهم الواقع في الدعوى"سلطتها في تقدير الأدلة". نقض " أسباب الطعن. ما”Short quotation from the judgment as published by the court. The full judgment is on the court’s official service.
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