Non-Compete Conditions in the UAE

Article Type: General

Provided By Lesley Yap for Khalifa Fund for Enterprise DevelopmentSME Knowledge UAE


 

Non-compete conditions can be found in many employment contracts, they are designed to protect a business owner’s interest by restricting potential competition. When hiring new employees, employers invest heavily in employee trainings and employees have access to employers’ clients and trade secrets. The recruitment process and associated administrative costs to bring in the foreign workers can also be quite time consuming and costly.

The Ministry of Labour will only approve non-competition conditions provided that the following are included in the contract:

  1. Place: Does not exceed the borders of the United Arab Emirates and may include one or two emirates, or the entire state.
  2. Time: The validity of the non-competition condition may not exceed two years from the date of the contract termination.
  3. Type of Work: Determine the type of work that may not be practiced as a condition for non-competition.

 

The employee has to be 21 years old at the time of signing the contract for this agreement to be legal.

A non-compete agreement may also not be considered valid if an employer attempts to add a clause that would potentially prohibit employees from working in the country after termination of their contract, example by adding the phrase: “employees may not work in the country at expiry of the contract” would be in violation of the law.

 

 

 

Abu Dhabi Government. (2013) Termination of Employment Contracts. www.business.abudhabi.ae.

United Arab Emirates Ministry of Labour. (2013). Labour Contract. www.mol.gov.ae.

United Arab Emirates Ministry of Labour. (2013). U.A.E. Labour Law. www.mol.gov.ae