In the UAE, an employer may refuse to provide NOC to an employee if he or she intends to join a competitor company. The Federal Decree Law No. 33 of 2021 on the Regulation of Employment Relations discusses non-competition clauses in an employment contract. According to Article 10(1) of the law, an employee may not compete with the employer in the same sector after the contract expires if the employee has access to customer or business secrets. The non-competition period should not exceed two years after the contract ends.
However, a non-competition clause may not apply if the termination of the contract is because of the employer’s actions. Article 12 (3) of the Cabinet Resolution No. 1 of 2022 states that the clause does not apply if the employer is at fault or fails to fulfill legal or contractual obligations. Additionally, an employee may agree in writing with the employer to waive the non-competition clause upon termination of the contract, as specified in Article 12 (4) of the resolution.
Under the conditions stated in Article 12 (5) of the Cabinet Resolution No. 1 of 2022, an employee may be exempt from the non-compete clause. These conditions include paying compensation not exceeding three months’ wage to the former employer with written consent, termination during the probation period, or being in professional categories determined by the Ministry. It is essential for an employer to cancel an employee’s work permit and UAE residency visa upon termination or resignation, as per the guidelines of the Ministry of Human Resources and Emiratisation (MoHRE).
In case your employer refuses to cancel your work permit and UAE residency visa when joining a competitor, you can file a complaint with MoHRE. Federal Decree Law No. 20 of 2023 Amending Certain Provisions of Federal Decree Law No. 33 of 2021 Regarding the Regulation of Employment Relationships outlines the procedures for filing a complaint against the employer for not canceling the visa. It is crucial for both employers and employees to understand their rights and obligations regarding non-competition clauses and work permit cancellations in the UAE to avoid legal issues.
