A reader wants to know whether any legal recourse can be taken against a company that rescinded an offer letter from an employee after the document has been signed.
Question: After working for five years with his current employer, an opportunity came up for my brother. He received an offer for a new role within the company, with a substantial salary increase. Upon accepting the offer, he resigned from his current position, which was formally documented on paper. His existing line manager and the prospective new one agreed to a transition period, during which he would continue working on both fronts to ensure a smooth handover.
Four weeks later, the new offer was withdrawn, citing restructuring. He was sent a withdrawal letter to sign, which he did not sign. Then, the organization opened the same position that they had withdrawn from my brother. When he asked HR what happened, he was told “realignment” as the reason. When he asked if he could reapply, he was told no. What legal recourse can he take?
Response: Pursuant to your queries, it is assumed that your brother is employed by a mainland company in the UAE. Further, it is assumed that your brother has been reinstated in his previous designation upon withdrawal of the new written offer by his employer. Further, it is assumed your brother’s employer has not made modifications to his employment contract with the Ministry of Human Resource & Emiratisation (the ‘MOHRE’) as per the new offer.
Therefore, the provisions of Federal Decree Law No. 33 of 2021 on the Regulation of Employment Relations (the ‘Employment Law’), Ministerial Decree No. 46 of 2022 regarding Work Permits, Job Offers and Employment Contracts Forms (the 'Ministerial Resolution No. 46 o 2022') and Administrative Resolution No. 38 of 2022 Concerning the Guidelines for Implementing Ministerial Resolution No. 46 of 2022 Regarding Work Permits, Offer Letters and Employment Contract Forms (the 'Administrative Resolution No 38 of 2022') are applicable.
In the UAE, an employer, while recruiting a prospective employee or a current employee in a new role upon resignation, needs to issue an offer letter that mentions the terms and conditions of the employment. Thereafter, the same terms and conditions should be mentioned in the employment contract of an employee. This is in accordance with Article 2(1) of the Ministerial Decree No. 46 of 2022.
Further, Article 1 of Administrative Resolution No. 38 of 2022, an offer letter issued by an employer, should be in the format prescribed by the Mohre.
At the time of applying for a new work permit, an employer should submit a signed offer letter between the employer and such employee. This is in accordance with the Guidelines to Work Permits, Offer Letters and Employment Contracts Procedures of Administrative Resolution No. 38 of 2022. Once an employer submits all other documents/requirements along with the signed offer letter and payment of relevant Mohre fees, the employment contract is signed between an employer and such employee.
In the event your brother’s employer rescinds the new offer letter issued to him, MOHRE may not accept his complaint as he has not signed a fresh employment contract with his employer and Mohre has not issued him a work permit in accordance with his new role. An employer or employee may be considered contractual parties to the employment only if a valid employment contract is registered with MOHRE. Therefore, without having a work permit an employer and an employee may not fall under the purview of MOHRE.
Therefore, if your brother’s employer has rescinded the new offer letter, he may consider filing a civil case against his employer in the court which has jurisdiction in the UAE to determine the matter for the monetary loss and other damages caused to him due to the rescinding of the employment offer letter issued to your brother.
If your brother’s employer’s internal policy states that an offer letter, once issued related to internal promotions and recruitments, is valid, then your brother may be entitled to be employed in a new role as per the new employment offer.
This is in accordance with Article 65(4) of the Employment Law, which states,
"The employer may establish and put in place organisational bylaws and programmes in the Establishment that would be more beneficial to the employee than those prescribed in this Decree-Law and its Executive Regulations. In the event of a conflict between such programmes and bylaws and the provisions of this Decree-Law, conditions that are more beneficial to the employee shall apply."
You may obtain further legal advice from Mohre or a legal practitioner in the UAE on this matter.
News Source: Khaleej Times
