Press Dossier    By Date   26/12/2021 UAE labour rules: Can companies withdraw an offer letter?

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.

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