Bullying UAE employer forcing resigned employee to sign non-compete clause contract

I quit my job but my employer did not even start the cancellation process until nine days later. Then, after my leaving date, they handed me a contract that mentioned that I cannot work in the same type of company anywhere in UAE. It said that if I break this contract I would have to pay them Dh300,000 and have a legal case brought against me. I have already made a case in the labour court regarding the cancellation and they say that they are making a case against me if I do not sign this paperwork. They also say that they will not cancel my visa. Do they have any legal rights to force me to sign it, as I do not want to? MT, Abu Dhabi

There are a couple of issues here. An employer is legally obligated to cancel the visa of someone who leaves their employment. Threatening not to do so, presumably to try to stop someone working elsewhere, is not only against the law, it is also the behaviour of a bully. That is a good reason to register a case with the Ministry of Labour. It is not unusual to see a non-compete clause in a contract of employment but it should have been there from the outset, as employers are not permitted to change any terms of employment without agreement. I do not believe that such a clause can be added retroactively, especially once someone has technically left service, and an employer cannot force a former employee, even when they have failed to cancel a visa, to sign such a clause. Article 127 of UAE Labour Law specifically states that where an employee performs a role that allows him to become familiar with confidential information, the employer may put in place an agreement with provisions that prevent an employee from working with a competing business after leaving service, but there are limitations. There is also guidance in the Civil Code as to how these clauses can be applied. Any non-compete clauses must be reasonable and must only limit conduct in a way that is necessary to protect legitimate legal and business interests. This means the clauses must be limited in duration, geographical scope and the nature of the restriction. Restrictions of more than six months are unlikely to be upheld in court and the employer would have to prove that it has been disadvantaged in some way to make a monetary claim, especially one of a large amount. A fixed penalty amount is not a reasonable request and unlikely to be upheld. Note that the penalty can only be enforced by way of a court ruling and the employer would have to pay a considerable amount in fees to even get a case to court. This looks to me like more bullying from an unreasonable employer.

Keren Bobker is an independent financial adviser with Holborn Assets in Dubai, with over 20 years’ experience. Contact her at keren@holbornassets.com. Follow her on Twitter at @FinancialUAE.

The advice provided in our columns does not constitute legal advice and is provided for information only.


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