New ADGM Employment Regulations – Recent Amendments

On 3 January 2025, the Abu Dhabi Global Market (ADGM) authority published the updated ADGM Employment Regulations (Regulations), which will come into effect on 1 April 2025. These regulations introduce several important changes that impact both employers and employees operating within ADGM. Our team contributed to the consultation paper circulated by the ADGM authority, which has led to the replacement and introduction of key provisions in the updated regulations.

Below are some of the significant changes to the ADGM Employment Regulations:

1. Recruitment Costs

Employers are now prohibited from requesting or demanding reimbursement for recruitment or cancellation costs associated with the employment process. This ensures that employees are not financially burdened by hiring expenses.

2. Recognition of Remote Working

The new Regulations officially recognize remote working in ADGM. Employers are now responsible for maintaining the technical equipment used by employees for remote work, unless agreed otherwise. This clarification ensures that both employers and employees understand their responsibilities regarding remote work arrangements.

Employees working remotely, who do not reside in the UAE, are not required to obtain a residence visa or work permit. This change makes it easier for companies to engage remote workers from outside the country without the need to go through a visa process.

3. Part-Time Employment

The Regulations acknowledge part-time employees and provide guidance on calculating entitlements based on the number of days worked by the employee.

4. Visa Cancellation Post-Termination

The Regulations stipulate that an employee's residence visa must be canceled "as soon as reasonably practicable" after the termination of employment. Further, this cancellation cannot be conditioned upon the employee waiving their rights under the legislation.

As a standard practice, we see that employers usually cancel the visa within thirty (30) days of the termination date. Keeping the employee on company visa for any longer may expose the employer as they are the sponsor on record for the employee.

5. Working Hours and Ramadan

The Regulations stipulate that working hours should not exceed 48 hours within any 7-calendar day period, unless otherwise agreed upon in writing by the employee.

Additionally, the Regulations introduce a reduction in working hours during Ramadan for Muslim employees, with their hours cut by 25% of the normal working hours.

6. Employment Contract Signing Deadline

To ensure clarity in the employment relationship, the employment contract must now be signed by both parties no later than one (1) month after the commencement of employment. This provision aims to prevent any confusion or disputes regarding the terms of employment.

7. Sick Leave During Probation

Employees are entitled to sick leave during their probationary period however, they will not be eligible for statutory sick pay during this time. This adjustment ensures that employees’ health needs are acknowledged, even if they are in their probation period.

8. Maternity Leave for Adoption, Stillbirth, and Miscarriage

Female employees are now entitled to maternity leave if they adopt a child under the age of five, suffer a miscarriage or stillbirth after the 24th week of pregnancy. This expansion of maternity leave reflects a more inclusive approach to various family circumstances.

Female employees are entitled to nursing breaks of no less than one hour during a working day for a period of nine (9) months after the birth of the child.

9. Bereavement Leave

Employees are entitled to five (5) days of bereavement leave in the event of the death of a spouse, parent, child, or sibling. This compassionate leave allows employees time to mourn and manage family affairs during a difficult period.

10. Discrimination Claims

The updated Regulations now include provisions for employees who experience discrimination and have included maternity and pregnancy as part of the protected characteristics. Employees may be entitled to compensation in the form of up to three (3) years of wages for successful discrimination claims.

11. Payment in Lieu of Notice

Employers must obtain the written consent of the employee before making a payment in lieu of notice. This provision ensures that employees are fully informed and agree to the terms of their departure.

12. Written Statement of Termination

Employers are now required to provide a written statement of termination within twenty-one (21) days of receiving the employee's request. This provides transparency and clarity regarding the reasons for an employee's termination.

13. End of Service Gratuity

Payment of end of service gratuity is now mandatory for all employees, regardless of the reason for termination. This ensures that employees receive their rightful financial entitlement upon the conclusion of their employment.

The new Regulations also eliminate the cap on gratuity payments, which previously limited them to a maximum of 2 years' wages.

14. Repatriation Ticket

Employers are required to provide employees with a repatriation ticket within thirty (30) days of the termination date. The employer may choose to either book the ticket themselves or reimburse the employee for the cost incurred in booking the repatriation ticket.

15. Pension Scheme Option

Employees may opt to enroll in a pension scheme as an alternative to receiving end-of-service gratuity, provided that the employer offers this option.

16. Waiving Rights Under ADGM Employment Regulations

Any waiver of rights under the Regulations will require a binding settlement agreement between both parties. This safeguard ensures that employees are not forced to waive their rights without a clear and mutual understanding.

Conclusion

With the implementation of these changes starting 1 April 2025, companies operating within ADGM will need to carefully review their policies and procedures to align with the new Regulations. These updates reflect a progressive approach to employee rights and employer responsibilities, particularly in the areas of family-friendly benefits, remote work, and non-discrimination.

For more detailed information on the amendments introduced by the ADGM, please feel free to contact the Gateley Employment Team.