Introduction
The Abu Dhabi Global Market (ADGM) has recently issued the Employment Regulations 2024 ("2024 Regulations"), which will come into force on April 1, 2025. These regulations establish minimum employment standards, rights, and obligations for employees and employers within the ADGM. This article provides a comprehensive overview of the key provisions of the 2024 Regulations, focusing on what employers need to know, practical implications, compliance points, and a comparative analysis with the previous Employment Regulations 2019.
Employers Holding a Dual License
Exemption from ADGM Regulations: Employers holding a dual license issued by the Abu Dhabi Department of Economic Development (ADDED) and whose employees are governed by the UAE Labour Law are exempt from the 2024 Regulations.
Hiring Employees
No Waiver of Minimum Requirements: The 2024 Regulations stipulate that the requirements are minimum standards and cannot be waived or excluded in any agreement, except where expressly permitted.
Settlement Agreements: Settlement agreements must be in writing, signed by both parties, and provide valid consideration. The 2024 Regulations now expressly state that for such settlement agreements, the employee must warrant in the settlement agreement that they had the opportunity to receive independent legal advice.
False Representations: Employers are prohibited from inducing or persuading individuals to become employees through misrepresentation of the availability of positions, type of work, wages, or other terms and conditions of employment. While the 2019 regulations also prohibited false representations, the 2024 Regulations introduce higher fines for such violations, reflecting a stricter stance on employer misrepresentation.
Visa and Permits: The 2024 Regulations provide more detailed requirements than the 2019 regulations. Employers are responsible for obtaining and maintaining necessary work permits, residency visas, and identity cards for employees. Employers must not request reimbursement from employees for these costs and must cancel permits and visas promptly upon termination of employment. An employer must not make the cancellation of the Employer Sponsored Residency Visa conditional on the employee waiving any rights under these regulations or making any payment to the employer.
Written Contracts: Employees must be employed pursuant to a written employment contract in English, signed by both parties, and provided to the employee within one month of commencement. The contract must include specific details such as job title, wages, working hours, leave entitlements, and termination notice periods.
Probationary Period
Probationary Period: Employers may subject employees to a probationary period, provided that such period is specified in the employment contract and does not exceed six months. If the term of the employment contract is six months or less, the probationary period must not exceed half the period of the term.
Leave During Probation: During the probationary period, employees are entitled to sick leave but not sick pay.
Termination During Probation: Either the employer or the employee may terminate the employment contract without cause by giving at least one week's written notice during the probationary period.
Repatriation Flight: If the employee's employment is terminated during the probationary period, regardless of the reason for termination, the employer is required to provide a one-way repatriation flight.
Working Time
Maximum Weekly Working Time: Employees' working time must not exceed forty-eight hours in a seven-day period unless the employee's prior consent is obtained in writing. The 2024 Regulations now introduce an explicit requirement for the employee's written consent to work overtime.
Reduced Working Hours During Ramadan: The 2024 Regulations explicitly state that Muslim employees are entitled to have their normal working hours reduced by twenty-five percent (25%) each working day during Ramadan.
Part-Time Employment Provisions
Pro-rata Entitlements for Part-Time Employees: Part-time employees receive entitlements such as vacation leave, sick leave, and maternity/paternity leave on a pro-rata basis, reflecting the number of hours or days they work compared to full-time employees.
Full-Time Equivalent/Non-Pro-rated Entitlements: If a part-time employee works every day of the employer's working week, their entitlements such as vacation leave, sick leave, and maternity/paternity leave will not be pro-rated. This ensures that part-time employees working a full week receive the same entitlements as full-time employees.
Types of Leave Available
Vacation Leave: The 2024 Regulations maintain the same vacation leave entitlements as the 2019 regulations and state that employees can carry forward accrued but untaken vacation leave into the next vacation leave year for a maximum period of twelve months. However, the 2024 Regulations clarify that the amount of accrued but untaken vacation leave to be carried forward may be agreed between the employer and the employee, provided that nothing shall prevent an employee from carrying forward at least five days of vacation leave in each vacation leave year. Under the 2019 regulations, a maximum of five days of vacation leave could be carried forward.
Maternity Leave and Pay: The 2024 Regulations explicitly state that maternity rights also apply to female employees (1) who are adopting a child of less than five years old, or (2) who give birth to a stillborn baby or suffer a miscarriage after the start of the 24th week of pregnancy.
Paternity Leave and Pay: The 2024 Regulations maintain similar paternity leave and pay entitlements as the 2019 regulations. However, it now includes the adoption of a child less than five years old in the paternity leave provisions, ensuring that adoptive fathers receive the same entitlements as biological fathers.
Ante-Natal Care and Adoption Proceedings: Under the 2024 Regulations, employees are entitled to reasonable time off during working hours to attend ante-natal care appointments or adoption proceedings. This entitlement applies to both pregnant employees and employees whose spouses are pregnant, as well as employees involved in adoption processes.
Bereavement Leave: The 2024 Regulations introduce new provisions for bereavement. Employees are entitled to five working days of bereavement leave on the death of a spouse, parent, child (including an adopted child), or sibling. Employees are entitled to be paid their daily wage during this period.
Remote Employees
Exemptions for Remote Employees Residing and Working in the UAE: For remote employees who reside in and work for their employer within the UAE, certain sections of the regulations related to workplace conditions do not apply.
Exemptions for Remote Employees Not Residing in and Not Performing Work in the UAE: For remote employees who do not reside in and do not perform work in the UAE, additional sections of the regulations are excluded. These include the section pertaining to visa and work permits responsibilities.
Vicarious Liability
Employer's Liability for Employee Conduct: Employers may be held vicariously liable for any act, attempted act, or omission of an employee in breach of the 2024 Regulations during the course of their employment. This includes acts of discrimination, harassment, or victimization.
Conditions for Vicarious Liability: Employers will be vicariously liable if the act, attempted act, or omission is sufficiently connected with the employee's employment such that it would be fair and just to hold the employer liable. Employers must show that they took all reasonable steps to prevent the employee from carrying out the act, attempted act, or omission to avoid liability.
Policies: Employers must ensure they have suitable workplace policies and procedures in place—such as those addressing harassment, bullying, grievances, disciplinary action, and equal opportunity—to show that reasonable measures have been taken to prevent unlawful behaviour by employees.
Non-Discrimination and Victimization
Prohibition of Discrimination: The 2024 Regulations now provide specific protection for pregnancy and maternity. Employers must not discriminate against employees regarding employment or any term or condition of employment on the grounds of sex, marital status, pregnancy and maternity, race, nationality, religion, age, or disability.
Definition of Discrimination: Discrimination includes treating an employee less favourably than others in the same circumstances, applying discriminatory provisions, criteria, or practices, and subjecting an employee to unwanted treatment related to prohibited grounds that create an intimidating, hostile, degrading, humiliating, or offensive workplace.
Reasonable Adjustments for Disability: Employers must take reasonable steps to overcome disadvantages faced by disabled employees due to physical features of the workplace or applicable provisions, criteria, or practices.
Victimization: Employers must not victimize employees by subjecting them to detriment, including dismissal, because the employee has done or intends to do a protected act, such as bringing proceedings under the non-discrimination provisions or making a formal allegation of discrimination.
Protected Disclosures and Retaliation
The 2024 Regulations provide robust protection for employees who make protected disclosures, commonly known as whistleblowing. Under these regulations, employees are safeguarded from any civil or contractual liability for making a protected disclosure, which includes reporting misconduct, illegal activities, or any other wrongdoing within the organization. Employers and any related parties are prohibited from retaliating against employees for making or intending to make a protected disclosure. Retaliation includes actions such as dismissal, disciplinary measures, demotion, or any other form of detriment. If an employer or related party retaliates against an employee, the employee may apply to the Court for a declaration and compensation.
Termination of Employment
Notice of Termination: Employers must provide written notice of termination, with minimum notice periods based on the length of continuous employment. In the 2024 Regulations, payment in lieu of notice now requires written consent from the employee.
Right to Written Statement of Reasons: Upon written request, employers must provide employees with a written statement of the reason for termination within twenty-one calendar days. Failure to comply may result in fines.
Garden Leave: Under the 2024 Regulations, during the notice period, an employer may require an employee not to attend work or undertake their duties, effectively placing the employee on garden leave.
End of Service Benefits
Calculation and Cap: The 2024 Regulations and the previous 2019 regulations both provide for the calculation of end of service gratuity for employees who complete one year or more of continuous employment. Under both sets of regulations, the gratuity is calculated based on the employee's basic wage and length of service. However, the 2024 regulations introduce a specific provision that the employee's basic wage must not be less than fifty percent of the employee's total wages. Additionally, the 2019 regulations imposed a cap on the total gratuity, limiting it to the wages of two years of service. This cap has been removed in the 2024 Regulations, allowing for potentially higher gratuity payments based on the employee's length of service and basic wage.
Practical Implications and Compliance Points
The ADGM Employment Regulations 2024 introduce significant changes and enhancements to employment standards, rights, and obligations within the ADGM. Employers should proactively review and update their practices and policies to align with these regulations, fostering a compliant and efficient working environment.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
