UAE Enacts 2025 Civil Code, Replacing 1985 Law in Employment Disputes

1 articles · Updated · Clyde & Co · Jun 11

June 1 brought the UAE’s new Civil Code into force, replacing the 1985 code and giving courts a stronger framework for deciding employment disputes around consent, disclosure, reliance and fairness.
Article 121 regulates pre-contract negotiations for the first time, requiring good-faith conduct and allowing claims for actual reliance losses if talks are handled in bad faith.
Article 122 adds a duty to disclose information material to the other party’s consent, raising the stakes in recruitment, promotions, terminations and other negotiations where information gaps are common.
Settlement agreements may face closer scrutiny when employees sign under financial, immigration or time pressure, especially if terms were rushed or there is little evidence they had time to review or seek advice.
The changes are not expected to upend UAE employment practice, but they increase pressure on employers to tighten offer templates, records, HR training and negotiation processes.