ADGM Employment Regulations Update

Proposed changes to the ADGM Employment Regulations

The Abu Dhabi Global Market (“ADGM”) Registration Authority has issued Consultation Paper No. 6 of 2024, proposing several amendments to the Employment Regulations 2019 (the “Proposed Regulations”).

These amendments aim to update the regulations to reflect global changes in work practices and provide clarity on rights and obligations of employers and employees. Key proposed changes include clarifying employee entitlements during probation, redefining 'Employee' to accommodate remote working, introducing entitlements for adopting parents and nursing breaks, simplifying overtime payment calculations, and addressing discrimination and victimisation. The paper also proposes procedural requirements for visa processing and cancellation, and considers introducing a statute of limitation for employment claims.

Feedback is invited from ADGM licensed employers, employees, legal advisors, and other stakeholders by 26 August 2024.

What are the key proposed changes?

The key proposed changes that ADGM employers should be mindful of from the Proposed Regulations are as follows:

• Remote/Hybrid Working: Introduction of remote and hybrid working arrangements for the first time creating additional flexibility. Currently, the Employment Regulations envisage employees working in or from the ADGM only. If these amendments come into force, employees could work remotely from anywhere in the UAE, and also overseas.

• Part-Time Employment: Introduction of a definition of "part-time employee" for the first time and sets out how pro-rating of entitlements would operate. Under the provisions, a part-time employee is defined as an employee whose employment contract stipulates: (a) less than 8 working hours per day; (b) less than 5 working days per week; or (c) terms of employment that otherwise do not constitute full-time work under the employer’s normal practices.

• Termination for unauthorised absence: Ability for employers to terminate employment due to unauthorised absence following formal notification. If an employee is terminated for cause due to unauthorised absence, the employer must inform the employee in writing that they will notify the ADGM that the employee has absconded if the employee does not make contact within 7 days of receiving the notification.

• Payment in lieu of notice: Removal of employer’s ability to unilaterally make payment in lieu of notice. If implemented, this would require the employee’s consent.

• Certificate of Experience: Following termination (for any reason), employees would be entitled to a certificate of experience within 14 days of a written request. The certificate must include details such as the employee's job title, dates of employment, and salary. Employers who fail to comply would be liable to pay the employee a sum equal to one month salary.

• Overtime: The Proposed Regulations remove the statutory entitlement to overtime pay. These calculations have been challenging for many employers to calculate, so the removal of these provisions is likely to be welcomed by employers. Instead, the amendments prescribe that an employee’s working time shall not exceed 48 hours in a 7-day period unless the employer has obtained the employee’s written consent. This is similar to the “opt-out” provision under DIFC employment law, which also allows employees to consent to work beyond the standard weekly hours. Employers who fail to comply with this requirement would be liable to a fine not exceeding USD 5,000. The same fine would apply to employers who require or allow their employees to work hours detrimental to their health or safety.

• End of Service Gratuity: Gratuity would be payable to employees regardless of the reason for termination, including cases of termination for “cause”. This change would ensure that all departing employees receive the gratuity payment they are entitled to, irrespective of the circumstances surrounding their departure. This aligns with the UAE federal law, which changed in 2021, and the DIFC employment law, which changed in 2019. This recognises that the gratuity is akin to a pension, and it would be unfair to remove the entire gratuity due to a single act of misconduct.

• Discrimination, Harassment, Victimisation and Vicarious Liability: Introduction of victimisation as a specific offence, prohibiting employers from subjecting employees to detriment for undertaking protected acts, such as bringing proceedings related to discrimination or giving evidence in such cases. Pregnancy and maternity would be included as protected characteristics under discrimination. Ability also for employees to seek a court declaration and compensation of up to 3 years’ basic wages if they are discriminated against or victimised (higher than that under DIFC law, which caps liability at 1 year). Employers would also be vicariously liable for acts of discrimination, harassment, or victimisation carried out by employees during their employment, unless the employer can prove they took all reasonable steps to prevent such acts.

• Probation Period Entitlements: Clarification of entitlements for employees on probation. An employee on probation will:

  a. Not be entitled to paid ante-natal or maternity leave.
  b. Be entitled to (i) 1 day’s paid sick leave per month, (ii) holiday but only if the employer agrees, and (iii) a repatriation flight on termination of employment (but not if the employee resigns to join another UAE employer or if he / she is terminated for cause).

• Holiday Carry Over: Ability for employees to carry over 10 business days holiday into the next year (increased from 5 business days).

• Adoption Leave: Introduction of new entitlements for adopting parents, including paid paternity leave for adopting fathers and paid time off for adoption appointments. The age cut-off for adopted children would also be increased from 3 months to 6 months.

• Maternity Leave/Nursing Breaks: Introduction of a 12 month qualifying service requirement for female employees to be entitled to maternity pay, and one paid nursing break per day of not less than 1 hour in aggregate for female employees until 9 months post-delivery.

• Bereavement Leave: Introduction of new bereavement leave of 5 business days of paid leave in the event of the death of a spouse, parent, child (including an adopted child), or sibling. This entitlement would be subject to the employee satisfying any evidential requirements reasonably requested by the employer. This leave entitlement is not currently offered in the DIFC, whereas the UAE Labour Law does provide 5 days of bereavement leave to employees.

• Health Insurance: Employers would have to provide health insurance for the employee’s dependents.

Next Steps

ADGM employers are encouraged to review the Consultation Paper and share their feedback on its provisions. The Paper outlines several key questions designed to solicit responses on various aspects of the Proposed Regulations. A link to the Paper is available here.

To participate in this consultation process, comments should be submitted in writing to the ADGM by the deadline of 26 August 2024. Comments can be directed to the official email address: The ADGM has also highlighted that all comments received will be considered for publication unless a specific request for confidentiality is made by the commentator.

For any queries relating to this (including our assistance in submitting comments on the Paper) and other general ADGM or UAE employment-related matters, please do not hesitate to contact David McDonald and India Dawson.