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Wednesday , April 21 2021

Labor rights are not subject to arbitration clause, says court – Worker’s case dismissed

KUWAIT CITY, Aug 12: The Court of Appeal annulled the ruling of the First Instance Court, saying it does not have the jurisdiction to consider the case involving a worker who sued his company due to the existence of an arbitration clause,” obliging the court to reconsider the case. It confirmed in the merits of its ruling that labor rights are not subject to the arbitration clause, reports Al-Seyassah daily.

Lawyer Sultan Al-Tawalah representing the plaintiff had demanded in the lawsuit his client’s dues from the company but during the hearing of the case, he was surprised to learn that the company owner had submitted a contract stating she sold the company and waived the license to another person. It was clearly stated in the contract that the jurisdiction therein shall be an arbitration that includes the entitlements of company employees- whatever the dispute arising in connection with the deal .

The lawsuit was deliberated before the Court of First Instance until it ruled that it “has no jurisdiction to hear the case due to existence of the arbitration clause,” which prejudices the rights of the worker, so Al-Tawalah did not accept the ruling and appealed against it at the Appeal Court.

He established his appeal on the fact that labor dues arising from the work contract are the jurisdiction of the Labor Department and the arbitration clause the appealed judgment relied on has nothing to do with the worker, while it governs the relationship between the company and the person to whom the facility was assigned, which does not affect the entitlements of his client.

He indicated that workers’ dues are related to public order and may not be the object of disclaimer by the owner of the company and the person to whom it is assigned under the pretext of the existence of arbitration clause. The Court of Appeal stated in the merits of its ruling that “relationship arising from the work contract falls within the jurisdiction of the labor circuit of the plenary court, and what is included in the sale and assignment contract does not affect the jurisdiction of judicial arbitration bodies formed in the Court of Appeal.

This is limited to disputes between the parties on the contract, as to what is raised from disputes regarding its interpretation, implementation or cancellation. Therefore, the appealed judgment, if decided that the court does not have the jurisdiction to hear the dispute in its entirety due to the existence of the arbitration clause, has erroneously applied the law in what should be canceled and then returned to the Court of First Instance.

After the issuance of the Court of Appeal ruling, Al-Tawalah stated that it happens sometimes that the owner of the facility sells the property and assigns it to another person while stating in the contract that any dispute that may occur has jurisdiction over an arbitration body, including the entitlements of its employees. Thus, the goal is to involve the worker in long legal procedures but this is contrary to the provisions of the Labor Law, which was confirmed by the Court of Appeal in its ruling.

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