“Appeal” ruling declares union formation illegal for workers in “Markets Authority”

The recent final “appeal” ruling, issued by the Capital Markets Department, resolved a long-standing controversy concerning unions in government agencies, with laws explicitly prohibiting their establishment.

The ruling, a copy of which was obtained by Al Jarida, established a key principle regarding the prohibition of establishing and declaring unions for workers in the government sector. This principle takes precedence over Law No. 6 of 2010, which governs work in the private and oil sectors but does not address the public sector. The ruling clarifies that the Civil Service Law and System, which outlines the rights and duties of public employees, does not grant the right to form unions in government agencies.

The ruling further stated that the Capital Markets Authority Law ensures the highest level of independence for the authority, distinguishing it from other government agencies in the country. It granted the Board of Commissioners significant powers and responsibilities due to the unique nature of the authority and the activities it oversees. The law also specifies the authority’s legal administration, outlining its specialized functions as an exception to the competencies assigned to the Fatwa and Legislation Department.

Moreover, by reviewing the provisions of Article 16 of Law No. 7 of 2010, which establishes the Capital Markets Authority and regulates securities activities, including its amendments. The article stipulates that, “subject to the provisions of Article 2 of Amiri Decree No. 12 of 1960 regarding the regulation of the Fatwa and Legislation Department of the Government of Kuwait, the Authority shall have a legal department reporting to the Chairman of the Authority. This department shall handle all cases, represent the Authority before all courts and arbitration bodies, provide legal opinions, and conduct investigations. It is also responsible for preparing drafts and proposals for laws, regulations, and decisions related to the Authority and its work.”

The ruling further added, “This confirms that the Capital Markets Authority is a quasi-judicial supervisory body, and that the legislator granted it independence in managing its administrative and financial affairs. This includes the jurisdiction of its legal department to exercise the powers of the Fatwa and Legislation Department, specifically issuing Fatwas and providing legal opinions on the provisions of Law No. 7 of 2010, which pertains to the establishment of the Capital Markets Authority and regulating securities activities, along with its executive regulations.

Furthermore, Article 27 of the Authority’s Law stipulates that, ‘It is prohibited for the commissioner or employee, while working at the Authority, to engage in any commercial activity on their own behalf or as an agent, guardian, or trustee.

They are also prohibited from practicing any other job, profession, or work in the public or private sector, providing any services or consultations directly or indirectly, or participating in the membership of the board of directors of any entity subject to the Authority’s supervision or any entity related to it.’