KHALEEJ TIMES, Sunday, Dec 26, 2021 | Jumada Al-Uola 21, 1443
UAE labour rules: Can companies withdraw an offer letter?
Emirates:
Answer: It is presumed that your queries are in relation to the federal
laws and regulations of the UAE in respect of employment relations i.e., the
Federal Law No 8 of 1980 on the Regulation of Employment Relations, as amended
from time to time (the Employment Law) and the subsequent Ministerial
Resolutions adopted in pursuance thereof.
The issuance of employment offer letters before execution of employment
contracts were made compulsory following the provisions of Article (1) and
Article (2) of the Ministerial Decree (764) Of 2015 On the Implementation of the
Ministry of Labour's Approved Standard Employment Contracts (the "MD 764/2015").
Pursuant to your queries, it may be noted that an employment offer letter has
the effect of a binding contract, once the same gets executed by the offeror and
the offeree. The terms of an offer letter upon execution cannot be changed
unilaterally by the offeror (i.e., employer) without the consent of the offeree
(i.e., the employee) and further provided that such change (i) is not
prejudicial to the offeree; and (ii) is approved by the UAE’s Ministry of Human
Resources and Emiratisation. This follows Article 4 of the MD 764/2015 which
reads as follows:
“Article 4 -
The employer must retrieve from the Ministry system a standard contract that
captures the same terms provided for in the employment offer signed by the
worker. The said contract shall be submitted to the Ministry signed by the
worker. No change may be made to the contract signed by the worker hereunder
without the worker's consent and provided such change may not prejudice the
worker's rights and only after the Ministry's approval of such change.”
In view of the foregoing, it may be noted that an offeror may withdraw its offer
letter (i) before the same is executed by the offeree; and (ii) by mutual
consent of the offeror and the offeree.
However, an offeree may challenge the offeror’s unilateral withdrawal. But it
must be noted that the outcome of such claims is largely based on merits, and is
determined on a case to case basis.