Employers’ rights under the new labour law
  • Employment law

Employers’ rights under the new labour law

While it may sometimes seem that the labour law is designed to only offer protection to workers, it does set out rights for employers also. The main objective of the law is to ensure the efficiency of the labour market in the UAE by attracting & obtaining the best talents the world has to offer and creating an attractive business environment in order for both employers and workers to flourish and thrive. The law also provides protection for both parties in a working relationship and delivers mechanisms for each to protect and obtain their respective rights throughout the contract. It is important for employers to act within the bounds of the law so that they do not put themselves in a position where they inadvertently break it. Some of the main rights that are most important for employers to be aware of are detailed in this article.

Pay in lieu of notice

If either party to the employment contract absconds during the notice period, the other party is entitled to a pay in lieu of notice, whether harm was suffered or not. This means that if a worker simply decides to stop showing up to work after they have given notice, they have to pay their employer a settlement called ‘pay in lieu of notice. The pay should be equal to the wage of the worker throughout the entire notice period.

Disciplinary Sanctions

In the event a worker behaves poorly or makes a sizeable error, an employer may impose the following sanctions: written attention draw, the written notice (warning), deduction of up to 5 days from wage, suspension of up to 14 days & denial of wage during a suspension, denial of periodic increments maximum 1 year, denial of promotion for a maximum of 2 years, dismissal with severance pay. If an employer is unsure if a worker has behaved badly or not, the employer may also temporarily suspend the employee for the purpose of conducting a disciplinary investigation for a maximum of 30 days with half pay. However, if the investigation concludes that there was no foul play then the employee must be reimbursed the entire missed wages.

Non-compete clause

An employer may make a provision in the contract for a non-compete clause into the employment contract, but it is only valid if it is used for the purpose of protecting legitimate business interests. An employer may write a provision in the employment contract stating that a worker shall not compete with or engage in any business which competes with the employer in the same sector after the expiry of the contract. The only instance where this clause is legal is in circumstances where the worker performs a job which gives him access to the secrets of his employers or customers. Furthermore, the clause should also specify exactly the place, time, and type of work that is bound by the non-compete clause and the length of time should not exceed two years. If the contract is terminated illegally by the Employer, the non-compete clause is automatically voided. Finally, the employer can only file an action within one year of the date on which the violation is discovered. If they wait any longer than this, the court will not hear the claim.

The law tends to offer more detailed protection for the party that is most likely in a more vulnerable position, but that does not mean that employers are simply hung out to dry. There are plenty of claims that an employer can make if they feel that they have been wronged in an employment contract against a worker they have hired. If you are an employer who has any specific questions regarding the labour law, please contact info@adglegal.com for some legal advice.


ADG Legal

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