UAE: Are Employers Allowed to Deny NOC for Employees Seeking to Join Competitors?

Question: I joined a company in mainland UAE approximately six months ago. After completing my probation period, I was informed that the company was experiencing financial difficulties, which led to my termination. I have since received a job offer from a new company that is a competitor of my former employer. However, my current employer has neither canceled my visa nor provided me with a No Objection Certificate (NOC). Could you please advise me on whether I can file a case against my employer and clarify my rights in this situation?

Answer: In the UAE, an employer can deny a No Objection Certificate (NOC) if an employee intends to join a competing company. Article 10(1) of the Federal Decree Law No. 33 of 2021 on Employment Relations allows for a non-competition clause in employment contracts, specifically designed to protect the employer's business interests. This clause must clearly outline the duration, location, and type of work prohibited, and it cannot exceed two years post-contract termination.

However, the non-competition clause may not be enforceable if the employment contract is terminated due to the employer's actions. Article 12(3) of the Cabinet Resolution No. 1 of 2022 states that this clause does not apply if the termination results from the employer's breach of obligations.

Moreover, employees may be exempt from the non-competition clause if they and their new employer agree in writing to its non-enforcement upon contract termination (Article 12(4)). Conditions for exemption also include compensation to the former employer not exceeding three months' salary or if the termination occurs during the probationary period (Article 12(5)).

An employer is obligated to cancel an employee's work permit following termination or resignation, per Article 7(3) of the Cabinet Resolution No. 1 of 2022. Failure to do so can be reported to the Ministry of Human Resources and Emiratisation (MoHRE) under the provisions of Federal Decree Law No. 20 of 2023. Therefore, you may not need an NOC, and if your employer fails to cancel your work permit and residency visa, you have the right to file a complaint with MoHRE.

News Source: Khaleej Times