Question 1: I have been working with a company for three years. In April 2020, I took pregnancy leave. One month later, I received an email from the company management saying that I was being terminated following an unsatisfactory annual performance report. Does the management have the right to terminate my services while I am on pregnancy leave? In case my termination is valid, does it affect my pregnancy leave payment? Do I have the right to request that I be reinstated through the Labour Court? And is a termination letter via email valid?
Answer 1: As per the UAE Labour Law, the employer does not have the right to terminate an employee who is on pregnancy leave. Such termination will be considered an arbitrary dismissal. Therefore, the questioner has the right to ask for compensation which is equal to three months full salary along with other end-of-service benefits. The termination does not affect the pregnancy leave payment. The questioner has no right to ask the Labour Court to force the employer to reinstate her services. Finally, termination via email is considered valid as per the UAE Labour Law.
Ban on working for competition
Question 2: I have been working for a private company in Dubai for four years. My contract is certified by the Ministry of Labour. As per my agreement with the company, I am not entitled to work with a new employer in the emirate for two years if I happen to quit. Can I ask the court to reduce this two-year period because it is not reasonable to be without work for two years? The condition of non-competition is part of an external paper and not recorded in the work contract, so is it valid?
Answer 2: As per Article 127 of the UAE Labour Law, where work assigned to a worker allows him to become acquainted with the employer’s clients or to have access to his business secrets, the employer may require him to sign an undertaking not to compete with him or participate in any enterprise competing with his own, after the termination of his contract. For such an undertaking to be valid, the worker must be at least 21 Gregorian years of age at the time the agreement is concluded, and the agreement must be confined, in terms of time, place and the nature of the business, to the extent necessary to safeguard the employer’s legitimate interests.
Article 909 of the UAE Civil Transaction Code says when the work entrusted to an employee enables him to have knowledge of the secrets of the employer’s business or to know the clients of the establishment, the parties may agree that the employee will not be entitled, after the termination of the contract, to compete with the employer or participate in a competitive business.
Such an agreement shall not be valid unless it is limited as to time, place and kind of work, to the extent necessary for the protection of the legitimate interests of the employer.
The employer may not avail himself of such an agreement if he terminates the contract without any cause attributable to the employee; nor can he avail himself of such agreement if he himself has given the employee adequate grounds to terminate the contract.
It is understood from these articles that the worker is committed to not competing with the employer during the validity of the contract, and the source of this commitment is law, in that he is committed to performing the work for the benefit of the employer and not for himself.
Outside the contract period, the source of the worker’s commitment to non-competition is the agreement and not the law, whether the agreement was stipulated in the work contract or a subsequent agreement.
The court has the right to estimate the conditions of the non-competition agreement as per the case documents and circumstances. But this agreement is conditional. The most important of this is the eligibility of the worker, i.e. reaching 21 years and not to be in absolute agreement in the sense that it is necessary to agree on the type of work that prevents the worker from competing with the employer. The agreement must determine the period of refraining from competition and its spatial scope to the extent necessary for the protection of the legitimate interests of the employer. Moreover, the employer should not compete with the worker with an exaggerated penal condition with the intent of compelling him to continue to work with him.
The High Court of Dubai in one of its decisions discussed the spatial scope by saying that the contract between the two parties stipulated that the plaintiff may not work in the same field except after two years and the prohibition was not intended for a specific place and region, which means that the prohibition became absolute in the place and was not limited to the place to which the employer’s activity extends. This leads to the consideration that the condition of non-competition is not correct. The prohibition of absolute competition is a complete waste of the freedom of the worker. If the act constituting the competition exceeds the place in which the employer begins his activity, he is not bound by this condition or falls void.