Post Termination Restrictions

Employees working on Key Positions e.g. Sales Directors, General Managers, CEOs or those who have the details of business operations, sales etc can’t leave their responsibilities like other employees. Certainly, there are serious concerns of the company on them as they might drive all the business with them to a new place. Non-Competition and Non-Disclosures are a few types that are or have to be accepted by the employees but at the time of signing the employment contract. These are a few types of post-termination restrictions. UAE Labour Law revised the implications and effects of non-Competition contracts or clauses. Now it is mandatory for an employer to enter into an agreement with the employee where there are chances or doubts that the employee can bring harm to the business. Article 127 before in UAE Labor Law, was not used to put a restriction like this as it was on the acceptance and consent of the employee.  

Post Termination Limitations: Explained

Termination Limitations or the Post Termination Limitations are the lawful measures and the legitimate restrictions on the employees, upon the time she or he has to leave the job for a new opportunity or for nothing. Its stops lawfully the working of an employee or a part working or the action of the employee. It is mostly applicable when an employee joins a competitor. Non-Competition Clause is one of the types of post-termination limitations or restrictions.  

Non-Competition:

As we stated above that now the non-Competition has to be signed by the employee with the employer/business when it is required. Article 127 UAE Labour Law about Non-Competition did not make it mandatory like today before. An important thing about this Non-Competition Cluse is that it has to b drafted in a legitimate way. Non-Poaching, Non-Dealing can be implemented with no flexibility but NCC has to be made as per the legitimate laws. It means an employee can’t be restricted from working all over the UAE. Major competitors and the territories or business places can also be added but on legitimate grounds.

New Law NCC in UAE Labour Law 2022

• New Law also mentions that restrictive provisions e.g. business places, terittories, industires, duration etc must be added on reasonable grounds.
• Now if it is required then mandatory that employee will sign the NCC with employer.
• Duration is maximum Two years now. Once the time period is finished then NCC does not exiaist more.  

Read Also About: Labour Law UAE 1980 Amendments – Summary

Other Types:

Apart from Non-Competition, an employee can be asked to sign a few other types of agreements like Non-Dealing, Non-Disclosure, Non-Poaching etc,

Non-Poaching:

Non-Poaching means an employee can’t take the other employees post-termination with him. If he is found guilty then the former employer can take legal action as per Law.

Non-Dealing

It saves the interest of a business not to be shared with competitors. It can also be signed by the employee at the time of signing the employment contract. It does not matter who contacts who.

• OLD Legal Support For this: As far as OLD Labour Law is concerned then Federal Law # 8 of 1980 states that if an employee is connected with business sales, clients, or most important operations where he can damage the business, sales, business productivity if he joins the competitor or opens his own company. It legally restricts an employee that he can’t join the same industry competitor, directly or indirectly or he can’t open his own company.
• NEW Legal Support For this: As far as NEW Labour Law is concerned then Federal Decree Law 33 of 2021, in Article 10 states the employee has access to employer’s business secrets and sales, can’t join the competitor or become the competitor himself for next Two years. Further details can be counted as:

1. For next Two years, employee who knows about the business and can damage the busies sales and growth, has to be restricted.
2. It is mandatory to be signed as this is not like before. But if it applies to a certain employee, who has access to business sales, clients and secrets.
3. Area, or the territory needs to be mentioned. Employee has to be restricted. The specified period can be less than Two years as well. It’s up to employer.

Reasons Doing this:

Initially when, such clauses were not added in UAE Labour Law, or it was not properly defined then employees used to take advantage and used to bring serious losses to the business. It was also seen that employers are destroying the career of an employee by restricting him for nothing or restricting him on illegitimate grounds. UAE Labour Law which has been revised several times for the betterment and improvement of business relationships is drafted with an aim to cover up the losses as much as possible. Now, in the year 2022, it has been reached a level where 100% rights of employers and employees are protected. It has reached a level where either party cannot cheat or destroy the other party.

For Better Understanding: Contact Al Shaiba Advocates and Legal Consultants, Business Bay, Dubai, UAE

For Better understanding, please book the legal appointment with the senior Emirati Advocate and Legal Consultant, Advocate Mr Mohamamd Ebrahim Hassan Al Shaiba. He is chairman of Al Shaiba Advocates and Legal Consultants and also popular for writing in Gulf News. He answers different legal questions in Gulf News.

Al Shaiba Advocates and Legal Consultants is a Full-Service Emirati Law Firm. Its fully equipped with modern resources, talented Emirati staff, hardworking paralegals and a motto to deliver the top legal services. From legal counselling to legal services, Al Shaiba Advocates and Legal Consultants is the best choice. Law Firm has served a few key business companies in UAE. Law Firm maintains confidentiality and Law Firm promises to offer the services no one can offer in Dubai and UAE.

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