Is clause that prevents UAE worker from switching jobs to competitor enforceable?

Keren Bobker advises on the non-competition clause which is in the contract of an employee in Abu Dhabi.

Non-competition agreements are common in the UAE. Pictured, Abu Dhabi. Sammy Dallal / The National

My daughter took a job with a company in Abu Dhabi a couple of months ago and I have just seen the contract she signed. She is just 19 but was told to sign the contract, which would be binding, to get paid. I am concerned, as although it is not for a fixed term and she is happy in the job so far, the contract includes a non-competition clause that states that if she leaves at any time she cannot work for any other company in a field that has anything in common with where she is now. As she works for a property company, that is a very broad definition and would limit her future career options. It seems extreme for someone in a junior position who does not interact with clients. What I would like to know is whether this in enforceable. CP, Abu Dhabi

Non competition agreements are common in the UAE, but generally apply to employees who are client-facing and/or in senior positions. Whether they are enforceable in all cases is also a moot point. In this case this is academic, as UAE Labour Law makes it clear that such clauses can only apply to someone aged 21 or over. Article 127 of Labour Law states that while such clauses are permissible, “such agreement shall only be valid if the employee has reached the age of 21 years at the time of its being executed and if the agreement is limited with respect to the place, time and nature of work to the extent as is necessary to safeguard the lawful interest of business”. It is clear that this case in the contract signed by CP’s daughter is invalid because of her age.

Keren Bobker is an independent financial adviser with Holborn Assets in Dubai, with over 20 years of experience. Contact her at [e-mail] Follow her on Twitter at @FinancialUAE

The advice provided in our columns does not constitute legal advice and is provided for information only. Readers are encouraged to seek appropriate independent legal advice

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