Questions & Answers
Non-competition clause and its application in the UAE
Dear Sir,
I am an Indian residence in Dubai for the last 24 years. I worked in a company with an unlimited contract for the last 14 years (from 2004) and left 15th March 2018.
My first unlimited labour contract was made in 2004. After that, it has been updated in 26-9-2017.
In the meantime, it is between my employer and me whenever they revise my salary they make a contract of 5 to 6 pages with the company rules and do's & don'ts.
In that, they mentioned that as below:
"The employee shall not, without the prior written consent of the employer, at any time during the period of 24 Months from the date on which he ceases to be employed by the employer take up part or full-time employment in any business where the Employer operates, or have shown good intention of operating, which in any way could be construed as being of a competitive nature to that of the Employer' business."
Dear Questioner,
Please note that the above is a non-competition clause which has no validity before the eyes of law since the geographical indication is missing.
Please note that Article 127 of UAE labour law and Article 909 and 910 of Civil Transactions Law clearly discussed the restrictive covenants in an employment contract such as non-competition, confidentiality...etc.
Please note Article 127 for your quick reference:-
Article (127) of the Labour Law states that:
"Where the work assigned to a worker allows him to become acquainted with the employer's clients or to have access to his business secrets, the employer may require him to undertake not to compete with him or participate in any enterprise competing with his own, after the termination of his contract. For such an undertaking to be valid, the worker must be at least 21 Gregorian years of age at the time the agreement is concluded, and the agreement must be confined, in terms of time, place and the nature of the business, to the extent necessary to safeguard the employer's legitimate interests."
In the clause quoted by you, your employer has not mentioned the geographical applicability of this clause which invalidates the clause as a whole.
Hope the explanation is satisfactory.
Thank you.
Regards,
Rajasree Ravivarma
0585013663
