Non-competition clause in UAE Labour Law

A labour contract may contain a condition specifying that after the completion of the contract, the employee shall not work with a competitor of the employer. This is to protect the interests of the business of the employer.

The UAE Labour Law states that if the job allotted to the employee allows him to know the employer’s clients or to know the secrets of the job, the employer may stipulate that after the end of his contract, the employee shall not compete with him or share information in any competing project.

A non-competition agreement may be signed before or during the term of the employment, but as per the law, it will only come into effect on termination of the employment contract. The employers may include a clause in the labour contract or sign an additional agreement banning the employees from working for competitors for a certain period. In order to apply non-competition clause certain conditions have to be fulfilled. The employee has to be 21 years old or more at the time of signing the contract. The agreement shall be, as far as time, place and nature of work are concerned, limited to what is necessary to protect the legal interests of the employer. If the job assigned to the employee allows him to know the secrets and know-how of the employer’s business dealings, then the employer may impose non-competition clause.

In the event that the employee works in a company, where such secrecy nature does not apply then the non-competition clause cannot be used.

To impose a non-competition clause against an employee, the non-competition agreement signed between the parties is to be restricted as per the provisions mentioned in the UAE Civil Code and the Labour Law.

Such a stipulation shall not be valid unless it is clearly restricted to certain time, place and type of work, in a sufficiently determined manner so as to constitute a real protection of the legitimate employer’s interests.If the employer terminates the employee or the employee terminates the contract due to a reason that is ascribed to the employer’s fault, then the non-competition conditions shall not be applied against the employee.

Maternity leave for working woman in UAE

I have worked in a company for 6 months only. I have completed the probation period, but currently I am in my ninth month of pregnancy and I have some questions in this regard:
1. Is the woman entitled to maternity leave each time or for once only within her employment with the company?
2. In case of depletion of the maternity leave, am I entitled to extend such period, if necessary, is it paid or without pay and what is the period of such leave?
3. For the period of my service, am I entitled to the whole maternity leave, which is, to my knowledge, 45 days and is it paid or without pay?
I would like to clarify to the questioner that as per the Labour Law the working woman is entitled to maternity leave each time she becomes pregnant and requires such leave, not for once. As for the questioner’s other enquiries, article no. 30 of the Federal Labour Law no. 8 of 1980 states the following:

“A female worker shall be entitled to maternity leave with full pay for a period of forty-five days, including both pre- and post-natal periods, provided that she has completed not less than one year of continuous service with her employer.

A female worker who has not completed the aforesaid period of service shall be entitled to maternity leave with half pay.

A female worker who has exhausted her maternity leave may be absent from work without pay for a maximum period of 100 consecutive or nonconsecutive days if such absence is due to an illness preventing her from resuming her work.
A medical certificate issued by a duly authorised medical institution or authenticated by the competent health authority confirming that the illness is a result of pregnancy or delivery shall document such illness. The leave provided for in the preceding two paragraphs shall not be deducted from other leave periods”.
Questions answered by Advocate Mohammad Ebrahim Al Shaiba of Al Shaiba Advocates and Legal Consultants.

UAE Labour Law and Probation Period

A company that exceeds six months probation is in violation of the UAE Labour LawArticle 37 of the UAE Labour Law states the following: “A worker may be engaged on probation for a period not exceeding six months, during which his services may be terminated by the employer without notice or severance pay; provided that a worker shall not be engaged on probation more than once in the service of any one employer. Where a worker successfully completes his period of probation and remains in his job, the said period shall be reckoned towards his period of service.”

US Consulate General moving to Bur Dubai-No US visas services from Aug 2-4

The US Consulate General in Dubai will move from its current premises at the World Trade Centre to a new facility in Bur Dubai, adjacent to Dubai Creek.

The new Consulate has been built on land donated to the US by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai.

Interviews and other services for US visas and routine consular services for American citizens will be suspended from August 2 to August 4.

All services will resume on Sunday, August 7 at the new building. Emergency services for American citizens will not be affected by the move.

American citizens seeking consular services during this period can make arrangements at the US Embassy in Abu Dhabi.

Jennifer Rasamimanana, Charge d'Affaires of the US Mission to the UAE, said: "We have here around 40,000 Americans residing in the UAE while we have around 1,000 companies operating here."

The new facility will allow the Consulate General to increase the efficiency and accessibility of its services to the public. It receives around 50,000 visa application a year for people from 125 different nationalities, mainly Iran.

Wife can sponsor Husband and Family in UAE

Sposering Husband in UAE,The Department of Naturalisation and Residency requires the following:

The wife shall be an engineer, doctor or teacher.

The salary shall be either Dh4,000 or Dh3,000 and accommodation.

If the wife job is other than the above listed professions, she shall make a petition to the Department of Naturalisation and Residency to exempt her from this requirement. The said department will decide on this request and pass its resolution of acceptance or rejection.

Public Sector Procurement -Public Tender Law in UAE

The Federal Regulation of Conditions of Purchases, Tenders and Contracts, Financial Order No. 16 of 1975 (the Public Tenders Law) regulates bidding for public sector tenders. With certain exceptions, only UAE nationals, foreign entities represented by a UAE agent, or foreign entities with UAE partners (i.e., a UAE entity with at least 51 per cent UAE ownership (‘national entities’) may bid for public sector tenders for the supply of goods and public works projects that are governed by the Public Tenders Law. As a result, foreign entities wishing to perform public sector contracts are generally required to have some level of UAE national participation. Such participation typically takes the form of either:

(i) A registered commercial agency

(ii) A ‘service agent’ of the foreign entity’s UAE branch office

(iii) The majority owner of a joint venture in which the foreign entity owns 49 per cent or less of a UAE limited liability company (i.e. a national entity).

The following are three major exceptions to the application of the Public Tenders Law: 

1) The Public Tenders Law does not apply to purchases and contracts conducted by the federal defence forces – procurements for the federal defence forces are conducted pursuant to Decree 12 of 1986 of the Deputy Supreme Commander of the Armed Forces (the ‘Armed Forces Procurement Regulations’.

2)The Public Tenders Law relates to federal government procurement and not procurement by the governments of the individual emirates. For example, Abu Dhabi has a procurement system, which generally tracks that of the Federal Public Tenders Law by requiring suppliers to have commercial agents or national companies that are registered with the Abu Dhabi municipality. 

3) The general requirement for UAE national participation is not uniformly observed by all government agencies in the context of certain direct sales to the public sector or private tenders in which the government solicits bids directly from relevant manufacturers, particularly in cases in which the goods or services are quite specialized or not widely available. These ‘exceptions’ arise on a case-by-case basis

Customs Regulations in UAE

On entering UAE at the airport or elsewhere, visitors may be subject to a check by customs officers. Tourists should take careful note of the following customs regulations:

Visitors to Dubai can bring the following items free of duty:

 » Gifts with a value not exceeding AED 3,000

» 400 cigarettes, 50 cigars, 500g of loose tobacco

» 4 litres of alcohol, or 2 cartons of beer (1 carton = 24 cans, each not exceeding 355 ml)

The following items of personal luggage are also exempt from duty, provided it is of a personal and not commercial nature:

 » Personal belongings, cameras, radios, CD and DVD players, projectors, telescopes, mobile phones, computers, baby strollers, portable music equipment, sports equipment

» Up to AED 40,000 in cash and travellers cheques provided the passenger is 18 or over

Items prohibited in Dubai include narcotic drugs, goods from Israel or with an Israeli logo/trademark, crude ivory and rhinoceros horn, gambling equipment, tires, radioactive material, forged currency, cooked and home-made food, and prints, sculptures, and lithographs.

There are several types of items that must be declared to Dubai Customs on arrival. Non-declaration of these is an offence. Such items include:

•  Cash (or equivalents) above AED 40,000 or $US 10,000
•  Pets
•  Skins of endangered animals subject to the CITES Convention
•  Books, films, DVDs, CDs, photographs
•  Gifts with a value of more than AED 3,000
•  Medicines – even if for personal use
•  Fireworks, explosives, weapons, ammunition, knives, swords, self-defence equipment
• Plants, trees, soil
• Narcotics
• Medicines

Note: Due to increasing concerns from readers concerning medicines we reference the following information. We take no responsibility whatsoever for its accuracy or whether it is currently up to date.

Statement on medication

Individuals may bring medicine into the country for their personal use. Up to three months’ supply of a prescription item can be brought into the country by a visitor and 12 months’ supply by a resident if they can produce a doctor’s letter or a copy of the original prescription. Narcotic items can only be brought into the UAE in exceptional cases with prior permission from the director of medicine and pharmacy control. These guidelines relate to medicines brought in by an individual through an airport or border crossing and medicines arriving by post. 

Visitors must take care to ensure that medicines and medications prescribed in their home countries are not restricted before travelling to the UAE. The UAE Ministry of Health’s Drug Control Department publishes a list of controlled medicines and medications. Visitors should contact the Ministry of Health drug control department to check whether their medication is on the controlled list, and needs prior permission for importation. The Customer Service Centre of the drug control department can be contacted by emailing drugcl.csc@moh.gov.ae, by telephone on +971 2 611 7240 or by fax +971 2 632 7644.

The following PDF documents are on the UAE Ministry of Health website:

 » Guidelines for Import of Personal Medicines

» List of Restricted and Controlled Drugs

Labour rights under husband's sponsorship in UAE

My wife has been working in a company for almost three years under a limited period contract that expires after six months. She is on my sponsorship and has a work permit. My questions are: Can my wife resign immediately or does she need to give one-month notice to the company as per the law? If the company does not accept her resignation, will the Ministry of Labour impose a ban on her although she is under my sponsorship? What are my wife’s rights for end-of-service gratuity in accordance with the labour law?

The questioner’s wife is working on a contract for a limited period and if the contract is terminated pre-term, she will lose her labour rights except the right related to leaves only. Also, the wife might be requested to compensate the employer an amount equivalent to a salary for 45 days if the employer proves that he suffered a loss or was affected by such behaviour. Finally, the employer might request the Ministry of Labour to impose a one-year ban on the wife due to this violation even if the wife is not under the company’s sponsorship.

Questions answered by Advocate Mohammad Ebrahim Al Shaiba of Al Bahar Advocates and Legal Consultants.

Dubai Court of Cassation clarifies terms for suing employee for joining competition

The Dubai Court of Cassation has ruled that that an employer has the right to seek compensation from an employee who breaches the terms of contract by joining a competitor, within two years of leaving office.
However, the court, while dismissing a case filed against an employee, observed that the employer should prove claims of damage caused by the action with clear evidence.
The pronouncements came during the hearings of a case in which a company sought Dh100,000 in compensation from one of his former employees for breaching the terms of contract by joining the company’s competitor.
The lawsuit was filed against a woman, a computer programmer, by a shipping company, which claimed that the defendant damaged the prospects of her former employer by joining its competitor and sharing the company’s internal secrets with her new employer.
The Court of First Instance, which first heard the dismissed it for lack of evidence of any damage caused by the employee’s actions, which prompted the plaintiff to appeal the verdict before the Court of Cassation.
The Court of Appeal upheld the ruling, but the company appealed the verdict once again before the Court of Cassation, which made the above observations.
The Court of Cassation rejected the company's appeal and based its ruling on the text of Article 127 of the law regulating labor relations.
The court said: “Although the employee had violated the non-competition clause mentioned in the contract, however, the breach did not result in harm to the company.”
The court added that the case documents are free from any evidence of damage to the company and hence, the plaintiff’s claims are not right.

Services & Investment Activities reserved for UAE Nationals

1. Commercial Agencies: Practice of trade agency Functions (registered exclusive agency agreements with the Ministry of Economy) within UAE is exclusively reserved to UAE nationals, either individuals or companies totally owned by natural nationals.

Ref: Federal Law No 18 of 1984 concerning the organisation of commercial agencies

2. Only UAE nationals and companies totally owned by UAE nationals may supply:

1. Real Estate Services
2. Rental/Leasing Services relating to Cars
3. Services Incidental to Agriculture, Hunting, and Forestry Services Incidental to Fishing
4. Placement and Supply Services of Personnel
5. Investigation and Security Services
6. Passenger and Freight Road Transportation

Ref: Decision of the Ministerial Council Presidency regarding the economic activities and professions excluded from the Decision of the GCC High Council of 2002 / 23rd Session Ref: Federal Law No 18 of 1984 concerning organisation of commercial agencies.

3. Travel Agencies and Tour Operator services are reserved to UAE nationals or individuals or companies totally owned by natural nationals. Ref: Federal Law No 18 of 1984 concerning organisation of commercial agencies.

4. Only the following services, among the Audio-visual Services and Recreational, Cultural and Sporting Services as defined in the WTO List regarding Services Sectorial Classification (MTN. GNS/W/120: 10 July 1991) may be supplied by foreign suppliers:

1. Studios for Artistic & Cinematographic Production and Photography
2. Theatrical Troupes
3. Movie Halls
4. Theatres
5. Halls for Artistic Exhibitions
6. Sporting Activities

Ref: Decision of the Ministerial Council Presidency No 2/203 of 25 April 2005.

5. The ownership of Pharmacies, Warehouses of Medicaments and Preventative Medicine Centres is limited to UAE nationals, either individuals or companies owned by natural nations (Articles 19 &35).

Ref: Federal Law No 4 of 1983 on the pharmaceutical profession and pharmaceutical comp

Property must be worth Dh1m for UAE's new 3-year real estate visa

Details surrounding the new three-year real estate visa announced by the UAE government last week are flying in thick and fast.The visa will not be available to investors in land, but will allow property investors to sponsor their families and stay in the UAE for three years without leaving, according to senior government officials.Major General Nasser Bin Al Awadi Al Menhali, assistant undersecretary for Naturalisation, Residence and Ports Affairs, told Gulf News that the full details of the law would be made public soon.

It is still unclear if the visa provides investors all the usual benefits of a residence visa, such as enabling them to open bank accounts and apply for local driving licences.While this website on Monday spoke to a source who claimed to be in the know as to what was discussed at these meetings before announcing the decision, no official statement has been forthcoming so far. Until now.

An official quoted in press reports today has stated that the value of the property will have to be Dh1million for an investor to sponsor his/her family and stay in the UAE for three years without leaving, after getting the visa. source had said that: “A number of proposals were discussed at the meeting with ministry officials and one of the proposals was to restrict stay of the property owner to nine or 10 months in a year. However, the final regulation is yet to be drafted.”

However, Gulf News on Tuesday quoted Major-General Nasser bin Al Awadi Al Menhali, Assistant Undersecretary for Naturalisation, Residence and Ports Affairs, as saying that those with property worth more than a Dh1m will be allowed to stay for three years on the new visa.

“Investors can have access to banking services through their international bank accounts. However, it is not yet clear if they can avail of regular benefits of a residence visa holder such as open bank accounts and seek local driving licences,” the paper quoted Menhali as saying.Again, this website’s source had said that access to a number of services - such as applying for a local driving licence, personal loans and getting admission to schools – was also discussed at the meeting.

“The longer duration was requested to allow investors, who want their children to attend schools, have enough time. Generally, schools have long summer holidays and Eid vacation. So, we though, nine or 10 months is sufficient,” the source said.

Sultan Butti bin Mejren, Director-General of Dubai Land Department was quoted by Gulf News as saying that the Dubai Land Department will check the value of properties to see if owners qualify for the extended visa scheme.The UAE Federal government on June 28 announced it was extending visa for real estate investors from six months to three years.

This website had reported then that the discussion about extension of the property visa was held about a month-and-a-half ago and a number of issues were discussed.Sultan Butti Bin Mejren, Director-General of the Dubai Land Department, said his department would be involved in checking the value of properties to see if owners qualify for visas."As soon as the bylaws are issued, the link between the two departments will be activated to check the real value of the property as well as the transaction that will alert the system of the transaction," Bin Mejren said.

Al Menhali added: "The aim of this law is not full residence in the UAE but to give more flexibility and make it easy for the investors to stay and move in and out of the UAE to manage and watch over their properties."

UAE bans credit card surcharge from July 1

Ministry of Economy has warned retailers in the UAE to stop charging fees on credit cards from July 1. Sultan bin Saeed Al Mansoori, Minister of Economy and Chairman of the Supreme Committee for Consumer Protection, headed the second meeting of the committee for 2011 which passed resolution prohibiting retailers from imposing charges on credit card usage as commission.
The committee also agreed on liberalising trade of 15 new products including detergents and washing powders, dairy products and juices, drinking water, livestock, feed, fats and oils, and the list will be sent to the cabinet for approval.
This is strategic to reduce monopoly and exploitation, and will enhance market competitiveness,” said Al Mansoori.
The committee reviewed a report on the advertisements for fast food outlets, and recommended that awareness measures must be initiated to ensure that customers are not misled by catchy advertising and resort to unhealthy eating, especially of junk food.
The committee also reviewed a report on the status of the Call Centre in the Consumer Protection Department, and another on the difference between the prices of key food items sold at cooperative societies and major retail outlets.
The committee discussed the Electronic System for Goods Monitoring which is expected to be operational during the second half of 2011. Currently, the ministry is undertaking a pilot phase with some commodities and the results will be generalised for other goods. The new system works through electronic links between the major trading centres and UAE customs ports, and can monitor the prices of 200 commodities on a daily basis.
The committee discussed a report on the increase of prices at gas stations and recommended to open channels of communication between the Ministry of Economy and all petrol stations with the participation of representatives from economic departments to identify the reasons for rise in price.
The committee was briefed on a proposal to reduce rental fees at retail outlets and cooperative societies. The committee recommended the distribution of marketing margins equally between retail outlets and consumers

Tas’heel -Online Goverment system for labour related process in UAE

Tas’heel is an online government system designed to simplify all labour related processes, improve output volume and increase efficiency. It allows companies and typing centers to make online transactions and payments to MOL, encouraging a paperless environment. Through Tas’heel, companies do not have to worry about physically submitting payments or documents Receive new labour card and mission labour card application

Transactions- Receive modify or lost labour card application
- National new labour card application
- Sponsorship transfer (express)
- Company License Renewal
- Relative Sponsor Work Permit
- Modify Work Permit
- Replacement of Work Permit
- Nawakas Scanning Document
- Cancel New Labour Card Application
- Online Cancellation
- Salary Certificate

Labour Card
Receive New Labour Card and Mission Labour Card Application: This application is used when attempting to apply for a Labour Card or a Mission Card for the first time. An employee can only be eligible for this application if he/she obtained their Labour Contract as well as their Medical Fitness test. This service can be accessed using the Transaction Number. For the normal new labor card must be submitted through TASHEEL system within 60days of entry otherwise penalty will be given by MOL.
For Mission Work permit it is valid for 3 month and must be submitted through TASHEEL system within 1 week from the date of his entry, otherwise fine will be 500 for each 10days delayed of submission.

Receive Modify or Lost Labor Card Application: This application is used when a modification is made to an employees’ nationality, salary or occupation. It is also used to replace a lost Labour Card. For Modification: A letter from the company is required with the old contract as well as the new contract stating modification in the new contract
For Lost Labor Cards: A letter from the police is required stating that the employee has misplaced his/her Labour Card and officially reported it to the authorities.

This service can be accessed using the Transaction Number.
National New Labour Card Application: This application is only applicable for U.A.E Nationals applying for a Labour Card for the first time. An employee can only be eligible for this application if he/she obtained their Labour Contract as well as their Medical Fitness test. This service can be accessed using the Transaction Number.
Sponsorship Transfer: This application is used when an employee is transferring to another job and must in turn transfer their sponsorship status. To complete the process, the employee must obtain the cancellation (signed by previous employer & employees) as well as the new contract (signed by the new employer and employee). This service can be accessed using the Transaction Number.

NOTE: After scanning the application correctly the PRO must submit the following documents at MOL:
The receipt from TASHEEL system.
The original cancellation signed by both parties
Computer card for the old company
Two contract copy from the application

Establishments
Company License Renewal: This application is used to renew a Company Trade License. This service can be accessed using the Company Code and License Number.

Work Permit
Relative Sponsor Work Permit: This application is used when a sponsored relative(wife/family members) is seeking a work permit and is required to provide no objection documents from the sponsor in order to proceed with the application. This service can be accessed using the Transaction Number.

NOTE: The following must be verified before entering the application into the system, otherwise the application will rejected:
The passport of the sponsored relative as well as the sponsor must be valid for at least 6 months
The residency of the sponsored relative as well as the sponsor must be valid for at least 1 month
The age of the sponsored relative seeking a work permit must at least be 21 years of age

Modify Work Permit: This application is used to amend information in the work permit such as name, nationality, passport number, etc. This service can be accessed using the Transaction Number.
Replacement of Work Permit: This application is used by the employing company who decide replacing a current employee on a valid work permit with a new employee using the same work permit without incurring additional or new charges. A work permit is valid for 60 days and can be extended for a maximum of 30 additional days. The replacement process can take place only if the work permit is valid. This service can be accessed using the Transaction Number. Create Temporary Work Permit: a person who holds residence visa at another company or family sponsorship. It will be valid for 6 months after getting the approval from MOL. The cause of this application will be depends upon the category of the company.

Miscellaneous
Nawakas Scanning Documents: Nawakas means ‘missing’ and this application refers to missing one (1) or more documents from the requirements submitted for Labour Card and Work Permit applications. This service can be accessed using the Transaction Number.
Cancel New Labor Application: This application is used when employee information is entered incorrectly in the Labour Contract Application and requires rectification. The incorrect application must be cancelled using this service after which the system will require an hour to update itself. Once this is done a New Labour application must be entered and submitted. This service can be accessed using the Transaction Number.
Online Cancellation: This application is used when an employer seeks to cancel the labour card and contract of an employee (who no longer reports to the employer). The cancellation can be signed electronically or manually depending on whether the company has an electronic signature. Signatures that are manually applied tend to get processed more efficiently and take less time. This service can be accessed using the Transaction Number.
Salary Certificate: This application is used when the Ministry of Labour requests from a company the salary certificate of a specific employee.

Cancel work permits and Labour cards UAE establishments directly approach Tas'heel centres

Establishments wishing to cancel work permits and labour cards need to directly approach Tas'heel centres

Abu Dhabi: Establishments wishing to cancel work permits and labour cards need to directly approach Tas'heel centres directly, as the Ministry of Labour will no longer provide this service starting on Sunday.Tas'heel is an online government system designed to simplify all labour-related processes.

According to Humaid Bin Deemas, Undersecretary at the Ministry of Labour, this step comes to save the time and effort of customers by providing the services, from typing application to cancelling of cards, at one stop, without having to visit the Labour Ministry offices.Bin Deemas called on establishments to present their requests directly to the 25 ‘Tas'heel' service centres in Dubai, Sharjah, Ajman, Fujairah, Ras Al Khaimah, Umm Al Quwain and Al Ain City.

In Abu Dhabi, establishments can apply through typing centres linked with the Tas'heel system.He pointed out that the ministry's offices will stop receiving requests for cancellation beginning on Sunday.

Bin Deemas said owners of establishments, who have the e-signature, may avail of this service starting on Sunday. However, those who do not have their e-signature have until September to get it, as manual applications will only be accepted until the end of September.

He said after the establishment owners cancel labour cards at the Tas'heel centres, the data will be sent electronically to the Labour Ministry. The Labour Ministry will then send the data to the Residency and Foreigners Affairs Departments.Bin Deemas said this service will benefit more than 280,000 establishments registered with the ministry and which carry out more than one million different cancellation transactions.

He also noted that the e-link project includes linking about 20 key services between the ministries of Labour and the Interior. the new procedure allows the owners of the joint system to facilitate the completion of the procedures for cancellation round the clock, seven days a week.

The Ministries of Labour and Interior will jointly implement the electronic cancellation service for labour cards, with effect from Sunday.The move comes in line with the first phase of the electronic link between the two ministries to boost the strategic partnership and achieve qualitative shift in exchange of data and information.

In accordance with this service, applicant firms seeking cancellation of work permits and labour cards will apply to the Tas'heel service centres set up for this purpose.