Limited and Unlimited Contract in UAE Labor Law

It is important as an employee that you should familiarize yourself with the labor laws of UAE so you know what you are committing yourself too.

There are two types of labor contracts which are as follows,

1- Limited Contract

This type of contract is for a limited time period which has a start date and an end date which is for two years and cannot exceed the term. It also must mention the notice period either it be a minimum of one month or maximum three months.

The contract will end once it completes two years term, or if both employer and employee mutually agree to end it, or if the employee commits any illegal act as per Article 120 of labor law.

In case if the employer singly wants to terminate the contract or renewed contract earlier with the reason not stated in Article 120 of labor law then the compensation to be given is of three months advance salary or the remaining period of the contract whichever is a lesser amount.

Same applies for the employees if they decide to resign with the reason not stated in Article 121 of labor law then they have to compensate with a half months salary for a period of three months or the remaining period of the contract whichever is a lesser amount.

2- Unlimited Contract

This type of contract has a start date but no end date known as an open contract. It can be terminated by any of the parties either be it the employer or the employee honoring the requirements of the notice may it be the notice period of minimum one month or maximum three months. However with the consent of both parties the contract may be terminated without notice requirements (notice period).

In case if the terminating party does not comply with the notice requirements for the early termination then they will have to face legal charges and compensate the other party.

Interpol Notices

Interpol notices refer to different types of notices which are issued by countries sharing key information about criminal offenders or suspects. By exchanging cooperation between Interpol countries, there is a higher likelihood of ensuring security and law and order. These types of notices which Interpol countries draw to effectively maintain law and order are:

1- Blue Notice
When the requesting country does not know the identity, location or activities of the criminal offender then Blue notice is issued through Interpol. Upon the criminal offender being found, the country informs the requesting country about it.

2- Orange Notice
Orange Notice is primarily issued when a country is in possession of genuine information that an individual or suspect is likely to constitute a threat to a country or commit an act of terror, thereinafter the other country is informed about the suspect being a danger to its security.

3- Red Notice
Red Notice is issued when the person has committed a serious grave criminal offence. Upon request of country, the criminal is placed under surveillance and arrested till extradited to the requesting country.

4- Green Notice
To provide warning and intelligence about the criminal offence committed by the offender.

5- Black Notice
Black Notice is issued in the event that there is a dead body of a person in a member country of Interpol; thereinafter this type of notice is made so as for individuals to identify the dead human body through Black notice

6- Yellow Notice
The notice is issued to locate and identify the missing or unidentifiable person

7- Purple Notice
The issuance of this notice is to seek and identify the methods and equipment’s used by the criminals.

Trademarks in the UAE

Trademark can be described in the form of drawings, signs, shapes or words notwithstanding voices which are used primarily by companies and businessmen for the protection of its products and services.

Each company has a specific designed trademark. Possessing a trademark is highly beneficial to businessmen and companies as it convinces a consumer to make a purchase which in return increases demand for a product or service. A trademark additionally helps customers to have an overview of the products of established companies.

To acquire a trademark, an application has to be duly made to the UAE Ministry of Economy by a local or foreign individual or entity. However in the event the trademark is already in existence and identical to other trademarks, the application shall be rejected. The only exception is if the trademark was removed from records then the other party may request for its use after three years of deletion.

After approval from the Ministry of Economy, the trademark has to be advertised within two newspapers before registration. Individuals have 30 days from the first date of approval being published, to contest. However, the trademark applicant may also challenge any objection raised within the 30 days.

The submitted request if rejected can be challenged within 30 days and if not accepted again, thereafter the trademark applicant can submit an application to the court to object any rejection within 60 days.

Purchasing Property in Abu Dhabi

UAE property laws differ within cities or provinces such as property laws in Abu Dhabi are not the same as in Dubai. This relates to the sale and purchase by expats and it could be said that the conditions in Abu Dhabi for expat purchases have not evolved to the same extent as those for expats in Dubai.

As per Abu Dhabi Law 19 of 2005, UAE nationals are permitted to buy and sell property whereas GCC nationals and expats will also be able to own a property in selected areas such as Investment Zones where they can purchase flats, villas or land, however the main difference will be that GCC nationals can sell or purchase freehold.

The Investment Zones include areas such as Yas Island, Saadiyat Island, Reem Island, Al Reef, Raha Beach and more.

The types of ownership for non-GCC nationals or expats include,

1- Usufruct
Under this ownership they may hold only the rights to their flat or apartment but not the land. The person can benefit from the property owned by the third party, as per Article 4(1) the person can benefit till the lease of up to 99 years.

2- Musataha
This method is more commonly used to purchase villas or land as under this ownership one can make full use of land owned by the third party. As per Article 4(1) the right can be exercised for 50 years further extendable once for up to 50 years.

Duties of a Property Broker in UAE

Being a Property Broker in the UAE is effectively being the middle man between the buyer and the seller in relation to change of ownership of a fixed asset (a property)

As per property laws of UAE, the duties and responsibilities of a broker include:

a- Verify if the property title deed is genuine
b- Keep a record of all transactions with supporting documentation
c- Not be a part of or facilitate any transaction that is against the law
d- The broker and the developer are governed under a contract that should be registered with the DLD
e- The broker may take copies of the documents relating to the property for the transaction
f- Confidentiality
g- As per trusteeship rules, act as a trustee on behalf of the client
h- Carry out due diligence to ensure the developer is in good standing and is registered with the DLD
i- In the event of a breach of contract, as per law the broker should give up fees or claims
j- Where more than one broker is engaged, they are to be held jointly responsible for the transactions unless otherwise specified

Extradition Requirements in UAE

Extradition is the process of handing over the person to a country where he or she was involved in an illegal activity.

In order for a person to extradited from one country to another, the act the person is accused of must be considered a crime both in the country requesting the extradition and in the country the accused is in currently.

The process involves signing an agreement between the countries for the person to be extradited. This is done via Interpol by issuing what is known as a ‘Red Notice’. A common misconception is that Interpol track down and arrest individual but, this is not the case. If a red notice has been issues, the accused can be detained pending an extradition application. Only once the extradition application has been approved can a person be sent to the country that made the request.

Clearly the issue of a red notice via Interpol can only be for crimes of a serious nature including fraud and counterfeit. There have been cases publicized even last year where red notices were requested illegally. UAE Banks, for example, cannot legitimately request a red notice to a European country for a bounced cheque. This is because bouncing a cheque is not considered a crime in Europe. Incidents were reported where the requesting bank illegally changed the crime from ‘bouncing a cheque’ to ‘fraud’. Although the accused were arrested, they were not extradited as it was demonstrated during the extradition application that the request was not valid.

Limited Liability Manager in a UAE Company

The formation of a Limited Liability Company in UAE is the widely used and adapted method by expat as it gives them ownership of 49% in a local business partnership.

The manger in a limited liability company can be appointed for a specified length of time or for an unlimited time. The appointment is to be made and governed under a memorandum of association(although at times can also be determined via a side bar agreement).

A general manger has the authority to take any action or decision in the best interest of the company. If it is stated in the memorandum of association that the manager cannot be removed then the only way to apply for his dismissal is to hold a vote with the shareholders to do so. It is important to note that the manager will still be held responsible and liable for his actions as the GM even after his or her removal.

In the event a third or external party files a complaint or case regarding any illegal or fraud the general manager can be held liable in his personal capacity.

Law of Intellectual Property in Dubai

Intellectual property refers to every and any creation of the mind. That could be an artistic work of literature or music, a symbol or design, a word or phrase or even a newdiscovery or invention.

Under UAE law,the creator of something has absolute rights over it. This means that it cannot be publicly distributed or used without the explicit approval of the owner. Anyone who does use that property without the owner’s permission could face fines from AED 20,000 to AED 50,000, up to two months’ jail, or a combination of both.

In the case of non-profitable organizations (like public libraries where literature is distributed for free) there are limitations to the extent of applying the same intellectual property rights (specifically regarding public service). This does not dissolve all elements however and in the event of a serious breach, the ‘owner’ has the right to file charges.

Any change to intellectual property made without the consent of the owner is illegal and only the owner has the right to determine how his intellectual property is publically distributed or used.

This is an important point to note, even where permission is granted, as altering or changing any element of that intellectual property could have serious legal consequences.

Introduction to Terms of Reference in UAE

In law and indeed in many blogs pertaining to law, you will come across the phrase ‘Terms of Reference’. In broad, simple terms, this is a document in which scope and limitations are to be defined.

This document is used in International Arbitrations signed as an agreement between the parties and the arbitrator which defines the time period (usually 6 months if not defined), terms, language and place of arbitration. The intention is to make the arbitration proceedings quicker and to facilitate the implementation (execution) of the outcome of that arbitration.

Terms and conditions defined in a Terms of Reference govern the arbitration proceedings under civil and arbitration rule in the UAE.

Operating under these express Terms of Reference has the added benefit of ensuring there is far less opportunity or possibility for an arbitration award to be annulled.

The information provided in the Terms of Reference should include the dispute itself, right of appeal, submissions of particulars (the facts) and defense of the parties involved.

Challenging Arbitration in UAE (Article 216)

The conditions under which the parties to an arbitration award may challenge (make a request to annul) its validity are governed by Article 216 as follows:

a- If the required number of arbitrators to hear the case were not present or where the arbitrators were not legally appointed, qualified or competent.
b- If the arbitration award was reached with reference to inadequate, out of date or non-existent terms of reference.
c- If the award was made based on Terms of Reference in which the specific dispute is not mentioned, or if the arbitrator exceeds the limits of jurisdiction given under those Terms of Reference.

It is becoming increasingly common for the losing party to challenge an arbitration award by filing an annulment case claiming it to be invalid due to the person signing the contract not having official permission although an experienced legal professional in the arbitration field will be aware of this point and be well prepared to effectively deal with it.

There is a possibility that both parties gave up the right to object to an award by virtue of not objecting in the first possible instance. This highights the importnce of having help and guidance from persons who are not only competant in arbiration protocol but also who have experience with the local processes and procedures.