UAE Employment Law under the spotlight – Kerry Calvert reviews the key issues

HFI has revamped its UAE Employment Law team in response to the rapidly evolving legal environment and market conditions in the Emirates. HFI's team now comprises Kerry Calvert, Angela Ewen, Adele Lombard, Ramzi Selouan and Sherif Gerges, providing a powerful combination of Engish/Arabic language skills, capability and experience.

Commenting on the key issues and problems which arise in relation to UAE employment matters, Kerry Calvert listed her "Top 10" based on the firm's recent experiences:-

  1. Getting contractual terms properly in place at the outset of employment, with particular reference to the UAE federal Labour Laws and special regulations applying for free zone entities;
  2. Cross jurisdictional issues where a senior executive arrives in the UAE under an existing contract from another territory and the implications as between these contractual arrangements and local statutory laws is not thought though for inward transfer or indeed the possible return to the home country in the future;
  3. Conflicts of interpretation arising where the employee may have more than one contract of employment in operation at the same time (whether intentional or by oversight);
  4. Interim arrangements where local managers or employees are lined up prior to the new business having its local company established and licensed and delays in getting residency/work visas in place as part of a new business establishment in the UAE;
  5. Non competition and "non poaching" clauses under UAE law;
  6. Withholding of non objection certificates on the transfer of employment from one UAE employer to another;
  7. The legal liabilities associated with compulsory payments to employees on termination of employment;
  8. Complications arising from the inter-play of UAE statutory severance pay rules and company pension fund and savings plans arrangements;
  9. "Banning orders" where employees leave employment in the UAE under contentious circumstances and the employer seeks to disbar them from taking up alternative employment in the UAE; and
  10. Arbitrary dismissal exposures on contentious terminations and dispute resolution processes.

The impact of UAE employment law needs careful attention both at the outset of a new employment event and on its termination, and also is a major risk area to be reviewed as part of any pre-acquisition due diligence.

The challenges are amplified by the lack of clear cut precedents and the impact of changing policy positions in the relevant Government Agencies and Ministries.

Further information can be obtained from:-

Kerry Calvert - kerry.calvert@hfi-international.com

Adele Lombard – adele.lombard@hfi-international.com