You may have encountered a competitor clause in employment contract UAE. This clause restricts an employee from joining a competitor company or starting a competitive business for a certain period after the termination of their employment contract.
However, implementing this clause in the UAE is governed by specific laws and regulations. This article will explore the non-compete clause in the UAE and how it works.
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Competitor clause in employment contract UAE 2023.
As per the Federal Decree Law No. 33 of 2021 on the Regulation of Employment Relations and Cabinet Resolution No. 1 of 2022 Concerning the Executive Regulations of Federal Decree Law No. 33 of 2021 on the Regulation of Employment Relations, a non-compete clause can only be enforced if it is mentioned in the employment contract.
The clause is applicable for two years after the termination of the employment contract and must specify the place, time, and type of work to be restricted.
Exemptions from the non-compete clause.
Employees can be exempted from the non-compete clause if they pay compensation not exceeding three months of their last agreed-upon wage to their former employer, and the former employer’s written consent is required.
The clause is also void if the contract is terminated during probation. Additionally, some professional categories may be exempted from the non-compete clause as determined by the Ministry under the employment classification approved by the Cabinet.
Legal action for breach of the non-compete clause.
Suppose an employer believes an employee has breached the non-compete clause. In that case, they may file a complaint with the Ministry of Human Resources and Emiratisation (MOHRE) and initiate a civil case against the employee.
However, the court may only consider a violation if the employee’s actions have caused financial loss to the former employer and if any confidential information is misused.
Younis Mohammed Al Blooshi Labour Lawyer & Legal Consultant.
In case of any legal disputes related to employment contracts, it is essential to seek the guidance of an expert labour lawyer. Younis Mohammed Al Blooshi Labour Lawyer & Legal Consultant is one of the best in the UAE for employment contract cases.
The lawyer has extensive experience dealing with various employment-related matters and can provide employees with expert legal advice and representation.
FAQs about competitor clause in employment contract uae.
The non-compete clause in employment contracts is a crucial aspect of the employment relationship in the UAE. It is essential to understand the legal provisions related to the clause to avoid any legal disputes in the future.
Specific laws and regulations also govern exemption from the clause and legal action for breach. Seeking the guidance of an experienced labour lawyer like Younis Mohammed Al Blooshi can help employees navigate legal disputes related to their employment contracts.
Contact the office of Younis Mohammed Al Blooshi via Whatsapp. Click here. Or visit us at our address: Sobha Ivory 1 – Al Amal St – Business Bay – Dubai. You can also call us on phone: 00971589984123.
A legal consultant specializing in UAE labor law. He regularly publishes articles on the website and writes on various areas of UAE law, with a specific focus on labor law.