The absolute prohibition of an employee working for a competitor is a restriction of his liberty- Dubai court of Cassation

If an employee chooses to work for a rival firm after the end-of-service period, the employer need not necessarily impose an absolute ban on the person. "The absolute prohibition of an employee from working for a competitor is a restriction of his liberty, ruled the court.

Alternatively, the ban can be specific only to the extent of protecting an employer's interests. For instance, a ban can be imposed if certain issues can be proved such as the person's inside knowledge of the company secrets, or the adverse effects on the employer due to the crucial time an employee left the company, etc. These should be mentioned under 'non-competition' section of the contract terms.

The new legal principle was pronounced when a case came up for hearing with regards to an employer requesting the court seeking Dh5million compensation from an ex-employee as he left the company to work for a competitor. The move was against the contract signed by both the parties, which states that he cannot work for a competitor before the lapse of two years from the end of the working relationship, said the plaintiff (the company owner).

The plaintiff said in his petition that the defendant worked as the Director-General in his company. He then quit and worked for a competitor before completing two years.

This was in violation of the contract between them, the plaintiff claimed.

He said the company faced a loss of about half a million dirhams as well as faced delays in a project because of the defandant's acts and sought Dh5m compensation from him.

The Court of First Instance dismissed the case but the plaintiff moved the Court of Appeals which upheld the lower court's ruling. Later the company owner moved the Court of Cassation.

The Court of Cassation, in turn, ruled the documents proved that the defendant had moved to the new company with the knowledge and consent of the owner (plaintiff) of the company, which meant that the company waived the "non-competition" condition included within their employment contract.

The court also refused to accept allegations that the defandant caused the company losses in one of its projects because there were no documents to prove the same.

The court added that it was clear all the company's contracts and project correspondence was made under the provisions of the owner of the company and its director of marketing which meant it is not serious.

Failure to pay wages considered arbitrary termination - Dubai Cassation Court

A case at the Dubai Cassation Court has resulted in six new principles - all favouring workers – governing labour relations.

Under its ruling, the court has decided that failing to pay wages is considered an arbitrary termination of service and entailed compensation.Also, salaries are not considered as cleared by the court unless the employer submits the relevant documents.

The ruling also found that even if the employer fails to take or finish the necessary procedures for employment, the worker still has rights and an employer’s obligations to workers should be fulfilled.

It also found that the worker’s uninterrupted service to the employer or his legal successor was considered continuous since the joining date, even if the two parties had more than one labour contract.

And lastly, the evidence of court-appointed experts can also be subject to evaluation before being used in sentencing. The court–appointed experts should meet the parties in dispute and failing to submit documents does not invalidate an expert’s report.

The six principles were issued on the wake of a case been brought to the Cassation Court.An employee had asked a company to pay him Dh3.7m he claimed that he was entitled to.

The employee had requested the payment of D450,000 in unpaid salaries and Dh50,000 for a month’s notice, Dh150,000 compensation for arbitrary termination of service, Dh88,000 for end of services, Dh3 million in commission entitlements, and Dh3,000 for a return air ticket.

Based on the report of an expert assigned by the Court of First Instance, the court had ordered the company to pay the plaintiff Dh3.4m and to provide an air ticket should he not find another job.

The Appeal Court has reduced the sentenced amount to Dh1.8 million, as the employee lost his right in claiming some of the commissions because of a lapse of over a year following the due date.

The company had appealed the sentence to the Cassation Court, which has turned down the appeal and upheld the sentence of the Appeal Court, ordering it to pay Dh1.8m to the plaintiff.

The Cassation Court has based in its sentence and principles on Articles No.1 and 58 of the Labour Law.

workers entitled to end fixed contract if companies shut down or end operations before the expiry of employment contracts-Dubai Court of Cassation

Companies that shut down and end operations before the expiry of employment contracts signed between them and workers is legally entitled to end working relationship, without considering it as arbitrary termination, ruled Dubai Court of Cassation.

The Court confirmed “the non-availability of the grounds provided for in Article 120 of the Labour Code, does not take away the right of employers to terminate the contract of fixed-term with his employees as long as they have the justification for such decision".

The Article 120 of Labour Code specifies cases wherein employers may terminate employment relationship with workers, in cases such as the latter not passing probationary period or violating instructions of work safety, or disclosing secrets of work, or if they involve in any crime, etc.

The Court of Cassation was hearing the appeal of a verdict of a case involving an Executive Director of a Dubai free zone company.

The plaintiff asked the court to oblige the company where he worked to pay him Dh493,000 (Dh150,000 as six months' salary; Dh170,000 compensation for unfair termination; Dh13,000 transportation allowance; Dh50,000 as housing allowance).

He also requested Dh5,000 half-annual allowance; Dh10,000 in tickets; Dh35,000 as end-of-service benefits; Dh26,000 instead of warning; Dh14,000 equivalent to the period of 17 days from the last month for working before being fired.

He said in his lawsuit that he had joined the company on a fixed-term contract for two years, at a monthly salary of Dh25,000 but was surprised with the decision of dismissing him after six months.

The Court of First Instance earlier ruled to dismiss the case. Later the Court of Appeal upheld the ruling of the Court of First Instance. However, the plaintiff did not accept either ruling and challenged the same before the Court of Cassation.

The Court of Cassation, in turn, accepted one request on the appellant - that of Dh14,000 for working for a period of 17 days - and rejected the other requests. The court said the appellant is eligible to receive Dh14,000.