The Labour Act allows employers to seek a limitation of the trade agreement that would apply after the termination of the employment contract. Article 127 of the Labour Law lays down certain conditions for the validity of a non-competition clause. The worker must be at least 21 years of age and the non-competition clause must be limited as regards time, place and type of work to the extent necessary to safeguard the appropriate interests of the employer. Therefore, in order to impose a non-competition clause, the employer must demonstrate that the restriction of non-competition is appropriate and necessary to protect its legitimate interests. The commercial and geographical scope of the restriction must also be consistent with this examination in order to be applicable. There is no legal limitation on the non-competition clause signed between an employer and its workers, but the Ministry of Human Resources and Emiratisation has indicated that it considers 12 months to be a reasonable period of time to limit competition. Article 909(3) of the Civil Code provides that an employer may not invoke a limitation after dismissal `if he terminates the contract without any reason attributable to the worker; nor is it in a position to agree on such an agreement if it has given the worker himself sufficient grounds to reorganise the contract`. Consequently, prohibitions of competition and debauchery cannot be imposed by an employer against a worker who has been arbitrarily dismissed or who has been resigned by the employer. Employment contracts submitted to the Ministry of Human Resources and Emiratization must be available in a standard bilingual form in English and Arabic. Employers` guidelines and circulars for workers must also be in Arabic, in addition to any other language that the employer wishes to use. However, the Arabic text still prevails. Any other agreement between the employer and the employee must not be translated into Arabic until it needs to be submitted to the Ministry of Human Resources and Emiratization or any other local authority in the United Arab Emirates.
In theory, prohibitions on competition between employers and employees in the UAE can be imposed both by the courts and through the administrative channels of the Ministry of Human Resources and Emiratization. However, in practice, only the administrative route is effective, although its scope is limited to restrictions that apply only to the United Arab Emirates and short-term employment contracts submitted to the Ministry of Human Resources and Emiratization. Discussions are under way on a new labour law and there is great hope that one will be adopted that covers areas of labour relations that are not currently addressed. It seems that there is a general consensus in the market that the changes to the Labour Law may not be enough to meet the phenomenal growth of the UAE economy in recent years and to meet the challenges of the coming years. . . .