Wooden judge gavel with word covid19. Concept of quarantine and law against covid-19.

Can the ongoing coronavirus-led limitations impact signed UAE labor contracts?

The coronavirus is having a global legal impact. We have received a number of parallel inquiries with respect to postponements or cancellations of offer letters or unofficial labor contracts set to start imminently. 

Employees are left with an announced departing date at previous positions and a postponement of months prior to supposedly start the position.

Some companies directly refer to the coronavirus occurrences, others’ claim the consequences of the coronavirus, namely the difficulty to process visas. We will be addressing the reality of these visa limitations in subsequent posts. It suffices to hightlight that newcomers may have a valid reason under the current visa restrictions but UAE existing residents could renew or process new visas without any limitation. 

Visa restrictions aside, on hold employees wonder about the certainty of such new commencing dates and moreover wish to know if they can take actions against the companies given that they have signed contracts with a commencement date that is no longer to be respected by the companies.

The brief answer is that unless the official contract (the one signed for visa processing purposes) has been signed or the offer letter of employment has been registered the authorities, the company could withdraw from the employment offering.

This is the reality of a number of employees that fly into the UAE with the excitement to start a new position to discover that the company has either changed the employment conditions (for the worse) or no longer wishes to continue with the employment. This takes place without any force majeure occurrence. 

In this occasion, having a force majeure event taking place does but reconfirm the strength of UAE based companies before the commencement of the official contracts with the authorities. 

To remedy this gap the UAE authorities enabled the possibility to register offer letters with the authorities in which case, registered contracts would be protected from subsequent alterations. However if offer letters are not registered, employees would not be protected from unilateral changes. 

To protect an employment relationship either the official engagement has started or the employment itself has started. Without these occurrences employees would need to seek recourse of the civil courts which would ultimately reject jurisdiction as the employee would be referring to a labor relationship that does not exist. Yes, employees in these circumstances would be left in a legal limbo. 

Evidently there are always exceptions worth pursuing yet the purpose of our post today is to cover the general coverage of similar cases. 

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