Employment settlement agreements are vital in resolving employment disputes and ensuring a fair resolution for employers and employees in the United Arab Emirates (UAE). These agreements, also known as settlement agreements or separation agreements, allow parties to reach mutually acceptable terms without resorting to lengthy and costly legal proceedings.
This article will explore everything you need to know about drafting an employment settlement agreement in the UAE.
An employment settlement agreement is a legally binding contract between an employer and an employee outlining the settlement terms reached in a dispute. It resolves issues such as termination, severance, unpaid wages, discrimination claims, or any other employment-related conflicts.
When drafting an employment settlement agreement, certain essential elements should be included:
In the UAE, mediation and arbitration are commonly used for resolving employment disputes. Including the settlement agreement provisions requiring parties to attempt mediation or arbitration before resorting to litigation can help expedite the resolution process.
Employment settlement agreements often include clauses prohibiting both parties from making negative comments or engaging in actions that could harm the other party’s reputation. Non-competition clauses may also be included to restrict employees from working for a competitor for a certain period after the settlement.
In the UAE, Arabic is the official language, and contracts drafted in Arabic are generally given more weight in legal proceedings. However, it is common to include a clause stating that the settlement agreement can be executed in multiple languages for convenience. If the agreement is translated, ensure that all versions are accurate and reflect the same meaning.
Specify a timeframe within which the settlement agreement must be executed, ensuring both parties have sufficient time to review and consider the terms. Additionally, include a provision addressing the revocation of the agreement, stating that it can only be revoked or modified in writing and by mutual consent.
Include a severability clause to ensure that if any provision of the agreement is deemed unenforceable, the remainder of the agreement remains intact and enforceable.
If the employee is transitioning to a new job, consider including provisions that address the disclosure of the settlement agreement to future employers and whether the employer will provide a reference or employment verification.
While drafting an employment settlement agreement, consulting with experienced employment lawyers in the UAE is highly advisable. Legal professionals can provide guidance on local labour laws, ensure compliance, and help protect the interests of both parties involved.
Employment settlement agreements in the UAE must comply with the provisions outlined in the UAE Labor Law. These provisions safeguard employee rights and ensure fair treatment. Ensuring that the terms of the settlement agreement align with the requirements of the labour law.
To make an employment settlement agreement legally enforceable, both parties must voluntarily agree to its terms and sign the document. It is recommended to have the agreement signed in the presence of witnesses or notary public to strengthen its legal validity.
Once an employment settlement agreement is executed, it is essential to adhere to its terms. Employers should ensure timely payment of settlements, benefits, or any other agreed-upon compensation. Employees should respect confidentiality provisions and refrain from making negative statements about the employer or the settlement.
Read more about: Employment Agreement Drafting And Notarization
Drafting an employment settlement agreement in the UAE requires careful consideration of the legal framework and the specific circumstances of the dispute. Employers and employees can effectively resolve employment-related conflicts by including essential elements, complying with labour laws, and seeking legal advice while safeguarding their rights.
An appropriately drafted settlement agreement can provide the following:
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Are you looking to draft a robust and legally sound employment settlement agreement in the UAE? Look no further! Our team of experienced drafting lawyers is here to assist you. With our in-depth knowledge of UAE labour laws and expertise in employment dispute resolution, we can guide you through creating an effective agreement that protects your interests. At Notary Public Dubai, we offer comprehensive legal services, including drafting and notarizing employment settlement agreements.
Our skilled drafting lawyers will work closely with you to understand the unique aspects of your case and tailor the agreement to address your specific needs. With our attention to detail and commitment to excellence, you can have peace of mind knowing that your settlement agreement will fully comply with the UAE legal framework.
Hassan Humaid Al Suwaidi is a UAE Citizen and the founder of the firm HHS Lawyers. He has a vast experience of 20 years of dealing with high-value and complex notary requirements. Hassan has been involved in some of the largest legal settlements in the UAE and is commended for his ability to attain the most favourable outcomes for his clients.