‘Help, my employee has joined a competitor in the UAE’
A look at what the rules say under Article 10 of Decree-Law No. 33 of 2021
Question : I am the owner of a company. A month ago, one of my employees submitted his resignation, and it came to my knowledge that he is working for a competing company in the same role that he worked for me. The other company was also in the same tower in which my company’s headquarters is located.
His employment contract states that he cannot work for a competitior for two years, and in the event of doing so, he will be liable to pay me Dh50,000 in addition to appropriate compensation. Do I also have the right to file a lawsuit against the competing company that employed this person and demand compensation?
Answer 1: Subject to the provisions of Article (10) of Decree-Law No. 33 of 2021 regarding the Regulation of Labour Relations, the following shall be observed in the application of the non-competition clause stipulated therein:
a. The geographical scope of application of the clause.
b. The term of the clause, provided that it does not exceed two years from the contract expiry date.
c. The nature of the work, such that it causes significant harm to the legitimate interests of the employer.
According to Article (12)/2 of Cabinet Resolution No. 1 of 2022 on the Implementation of Federal Decree No. 33 of 2021, if a dispute arises over the non-competition clause and it is not settled amicably, the matter shall be referred to the judiciary and the burden of proving the alleged damage shall lie with the employer.
The appropriate action to be taken against your ex-employee is to file a labour case, starting with a labour complaint against him to demand the Dh50,000 agreed upon with any other appropriate compensation.
You may also include the competing company that employed him and demand appropriate compensation, taking into consideration that the burden of proving the alleged damage shall lie with the employer against both the employee and his new company.