Questions & Answers
Are non-compete and training repayment clauses valid under UAE labor law?
Hello,
My wife, who is on my dependent visa in the UAE, has received a job offer. She plans to remain on her dependent visa, and the hiring company has included additional terms in her employment contract.
These terms include:
- A two-year non-compete clause, preventing her from working in a competing business in the UAE after leaving the company.
- A requirement to repay AED 10,000 for training costs if she resigns within one year of starting the job.
- A clause stating that resigned or terminated employees will not receive any bonuses or incentives after leaving.
- A disclaimer that any clause violating the UAE Labour Law (Decree-Law No. 33 of 2021) will be considered invalid.
Are these conditions legally enforceable under UAE law?
Can I include a statement to ensure both parties are legally safe?
The non-compete clause must be clearly defined; otherwise, it will be invalidated.
The AED 10,000 clause is illegal unless there is actual, proven training.
Deprivation of end-of-service gratuity is not permissible, but future incentives may be suspended.
The presence of a disclaimer strengthens the employee's legal position.
Greetings,
Under the UAE Labour Law (Decree-Law No. 33 of 2021), certain contractual clauses are subject to strict limits:
Non-compete clauses must be reasonable in scope, duration, and geography, and courts often reduce or nullify overly broad restrictions.
Training cost repayment is only enforceable if the employer can prove actual, documented expenses directly related to the employee’s training.
Forfeiture of bonuses/incentives after resignation or termination may not be valid if these benefits were contractually earned.
The disclaimer correctly states that any clause conflicting with the UAE Labour Law would be considered void.
Since enforceability depends on contract wording and practical application, we recommend a detailed legal review. You may book a consultation with us or authorize us to represent you to ensure both parties are fully protected.
Dear User,
The law allows non-compete clauses if they are of a specific duration, location, and are reasonable to protect the company’s legitimate interests. A general clause prohibiting employment in any competing company for two years is usually unenforceable.
Training costs (AED 10,000) can only be claimed if there is a written agreement and the company can prove the actual expenses; automatic repayment clauses are void.
Rewards and incentives may be linked to attendance and continued employment, but the employee cannot be deprived of basic legal rights such as due salary, unused leave, and compensation for unfair dismissal.
The disclaimer stating that any clause violating the law is invalid protects the employee, as any provision conflicting with the UAE Labor Law will be automatically nullified.
To protect both parties, clarify the duration and scope of the non-compete clause, document any training and its costs, clearly state incentives linked to the law, and retain all agreements and correspondence.
Dear Questioner,
Thank you for your message!
Here is a summary regarding the enforceability of the clauses you mentioned under the UAE Labour Law (Decree-Law No. 33 of 2021):
Non-Compete Clause (Two Years)
Non-compete clauses are enforceable only if they are reasonable in scope, duration, and geographic area.
A two-year restriction may be considered excessive, especially for lower-level employees, and could be challenged in court. Courts usually require such clauses to protect a legitimate business interest and not unreasonably restrict an employee’s right to work.
Training Cost Repayment (AED 10,000)
Employers can require repayment of training costs if the training was actually provided and the contract clearly states the terms.
Since your wife is still on a dependent visa, this clause may be enforceable only if the training occurs, and it must be reasonable in value.
No Bonus or Incentives After Resignation
Employers can withhold discretionary bonuses or incentives if the employee resigns before they are due, but any contractual entitlement already earned cannot be denied.
Disclaimer on Invalid Clauses
Including a statement that any clause violating the UAE Labour Law is considered invalid is good practice and provides additional legal safety.
Recommendation for Legal Safety:
Your wife can propose adding a mutual compliance statement, such as:
“All terms of this contract shall be interpreted and enforced in accordance with the UAE Labour Law. Any clause found to be unenforceable under applicable law shall be deemed void, without affecting the validity of the remainder of the contract.”
This ensures that both parties are legally protected and reduces the risk of disputes over unlawful clauses.
If you want, we can draft a contract addendum or statement that can be included before signing, ensuring full compliance with UAE law.
Best regards,
Mohammed Salah
Legal Consultant
