No ‘either or survivor’ in UAE law

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No ‘either or survivor’ in UAE law

Published: Mon 10 Dec 2012, 9:25 AM

Last updated: Tue 7 Apr 2015, 12:39 PM

I have been a resident of Dubai for 25 years. My husband and I have kept our savings in a joint bank account. My husband has not written a will. I wanted to know if the Shariah law applies to Muslims only. I also wanted to know whether the money that is in my name will be transferred to my husband if he is registered as a nominee, or do I need to make a will also?

Currently, the UAE law does not have the concept of ‘either or survivor’. Therefore, in case of death, all bank accounts will be frozen even if they are joint. Hence it is necessary to make a will. However, lawyers will have to executed the will here.

Inheritance issues for Muslims shall be dealt with in accordance with Shariah principles, and for others, the law of the deceased’s homecountry applies. Article 17 (1) of the Federal Law No 05 of 1985 (Civil Code) states that: “Inheritance shall be governed by the law of the deceased at the time of his death.”

Furthermore, Article 1 of the Personal Affairs Law No.28 of 2005 (the ‘Law’) states that this law “shall equally apply to non-citizens unless one of them asks for the application of his law.” Therefore, if any non-citizen made any will, that will be enforced. Your money will not be transferred to your husband directly even if he is registered as a nominee, therefore, you have to make a will. The notary public is registering wills for non-citizens these days.


Notice period

I am working in a company in Dubai and my visa is yet to be stamped. I have completed my medical and Emirates ID process. However, I submitted my resignation and the management rejected it. I was told to give three months’ notice period to find a replacement and to train the person before leaving. Is this legal? Can they deduct charges for my visa and avoid paying my salary dues? Please advise.

Unless otherwise provided in your employment contract/letter, you are within the probation period; therefore, you or your employee can terminate the contract at any time without notice as per Article 37 of the UAE Labour Law. However, if it is mentioned in your contract that you have to give three months’ notice, then, you must give it. Also, if early termination causes losses to your employer, then, Article 116 of the Labour imposes an obligation upon you to compensate your employer. Furthermore, in any event such compensation shall not exceed half a month’s pay for three months. Article 116 states: “If the contract has been terminated on the part of the employee, for reasons other that those provided for under Article (121) hereof, the employee becomes liable for compensating the employer against losses incurred by him in consequence of contract termination, provided that the amount of compensation, may not exceed half a month’s pay for three months or for the remaining period whichever is shorter, unless the terms of the contract provide otherwise.”

Furthermore, as a general principle of the civil law system, the burden of proof lays on the person who is claiming such rights as per Article 113 of the Law No. 5 of 1985 in respect of Civil Transactions (the ‘Civil Code’). “It is the responsibility of the claimant to prove his claim and that of the respondent to refute it.”

If your employee claims any losses, he has to prove that losses resulted from your termination of the employment contract.


Non-competitive clause

While signing the contract of employment, my employer added that: “I am not allowed to work for any competitor company in the UAE and the GCC for the next two years if I resign from this company.” That agreement also stipulates that I need to pay Dh10,000 as penalty or compensation if I leave this company before the completion of three years of contract. If I get a better job offer from its competitor company and if I resign from my job, can my employer file a case against me? How do I avoid legal action? What should I do? Please advise.

A non-competitive clause is a restrictive clause incorporated in an employment contract or ancillary agreement signed by an employee. A non-competitive clause prevents employees from working for a competitor upon termination of their employment agreement, or having any business dealings with the employer’s clients or prospective clients soliciting or enticing away clients and employees of the employer.

Generally, non-competitive clauses are recognised by the UAE law, but subject to certain conditions. Article 127 of the UAE Labour Law deals with non-competition which states: “Where the work assigned to a worker allows him to become acquainted with the employer’s clients or to become familiar with the secrets of his business, the employer may require him to refrain, after the termination of his contract, from competing with the employer or participating in any enterprise that is in competition with the employer’s own business. Such agreement shall be valid only on condition that the worker is at least 21 years of age at the time the agreement is entered into and that the agreement is limited as to time, place and the nature of the business, to the extent necessary to safeguard the employer’s lawful interests.”

However, the application of Article 27 of the UAE Labour Law is subject to the fulfillment of certain conditions, such as clear limitations as to time, place and type of business activity, and it must protect the lawful interest of the employer. Therefore, the court restricts the application of non-competitive clauses if they fulfill the following conditions:

  • The employee agreeing to it must be at least 21 years old.
  • It must be necessary to protect the legitimate interests of the employer.
  • It must be limited in its geographical scope.
  • It must be limited in its duration.
  • The clause must be limited to the nature of business activity;

In the absence of these conditions, courts are generally reluctant to enforce non-competitive clauses where they impose an unfair set of conditions on the former employee. Furthermore, such clauses take into consideration the factual background specific to each employment agreement. The Federal Supreme Court ruled in Case No. 342 for the 27th Judicial Year, dated March 24, 2008 that “non-compete clauses are enforceable only if the restriction is for a short time, geographically confined and must be limited to the need to protect the interest of the employer. Therefore, if any of these conditions lacks, the non-compete clause shall be considered void....” In the same case, the court rejected the non-competitive clause which was for a longer term of three years.

Keeping in view the above, your non-competitive clause will be mostly rejected by the court as it is for a longer term and the application covers the whole of the UAE and the GCC.


Mushtaq Ahmad Jan is a lawyer at the Global Advocates and Legal Consultants, with a Master’s Degree in International Commercial Law from the University of Hull, Kingston-upon-Hull, England. Readers may e-mail their questions to: news@khaleejtimes.com or send them to Legal View, Khaleej Times, PO Box 11243, Dubai.

Compiled by Ahmed Shaaban

By Mushtaq Ahmad Jan

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