Discussions

Private-sector employment relationships in the United Arab Emirates are governed by Federal Decree-Law No. 33 of 2021 on the Regulation of Labour Relations (the UAE Labour Law), which came into force on 2 February 2022. The legislation establishes a structured legal framework aimed at maintaining labour market stability, while balancing an employer’s right to protect legitimate commercial interests against an employee’s freedom to pursue professional opportunities following termination.

Within this framework, Article 10 of the UAE Labour Law regulates post-termination non-compete obligations. The provision reflects a clear legislative intent to treat restrictive covenants as an exception rather than the norm. Accordingly, such clauses are permissible only in limited circumstances and are subject to strict substantive and procedural conditions. Further guidance is provided by Cabinet Resolution No. 1 of 2022, issuing the Executive Regulation to the UAE Labour Law, particularly Article 12, which sets out detailed parameters governing enforceability.