Federal Decree-Law No. 25 of 2025 (the New Civil Code) came into force on 1 June 2026, replacing the 1985 Civil Code. While the UAE Labour Law remains the primary source of employment regulation, the New Civil Code is expected to assume greater importance in shaping how employment disputes are determined, particularly where issues of consent, disclosure, reliance and fairness arise. The changes are not expected to result in a radical departure from existing employment practices. However, they are likely to increase the importance of careful drafting, documentation and process discipline, particularly during recruitment, negotiations and settlement discussions.
Article 121 of the New Civil Code expressly regulates pre-contractual negotiations for the first time, requiring parties to negotiate and withdraw from negotiations in good faith. While parties remain free not to conclude a contract, bad-faith negotiation conduct may give rise to liability for actual losses incurred in reliance on the negotiations.
In an employment context, this may become relevant during recruitment or senior hiring discussions, particularly where a prospective employee has taken steps in reliance on an offer, such as resigning from an existing role or relocating.
Employers may therefore wish to review offer documentation, ensure conditions are clearly stated and maintain appropriate records where offers are withdrawn.
Article 122 introduces a...
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