Abu Dhabi Global Market (ADGM) Registration Authority (RA) is set to transform the financial landscape with the implementation of groundbreaking new employment regulations in its dynamic free zone, setting the way for a new era of business and opportunity. It has released the set of Employment Regulations 2024, replacing the Employment Regulations, 2019. These new regulations will be effective from April 01, 2025 and will apply to all employers and employees in the ADGM.
Let’s explore the key changes in the new framework, that are designed to align it with the evolving global workplace and with the objective to provide enhanced legal clarity for both employers and employees, stating their respective rights and responsibilities:
Amended the definition of an “employee”
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- Introduce the model know as “Remote Employee”, the one who do not reside and work in the United Arab Emirates (UAE) do not require a UAE residence visa or ADGM work permit.
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- Introduced the model know as “Part-Time Employee” which will assist employers with calculating leave and other entitlements for employees who work a reduced week.
Work permit and visa.
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- The new regulations outline, specific requirements for obtaining and cancelling employee work permits and visas, removing uncertainties in these processes.
Employment Contracts and Probation Period
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- Employers must provide a written employment contract that meets the new ADGM regulations within one month of employment, and any non-administrative changes to the contract require written agreement from both parties.
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- The probationary period cannot be more than six months or half the length of a fixed-term contract under six months. Employees retain rights during probation, including leave approval and entitlement to a repatriation flight, if terminated.
Working Hours and leaves
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- Working hours are capped at 48 hours per week unless the employee agrees otherwise in writing. During Ramadan, Muslim employees get a 25% reduction in working hours without a pay cut.
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- Leave policies include the ability to carry over up to 5 days of annual leave, 5 days of paid bereavement leave, and expanded maternity and paternity leave rights, including nursing breaks and adoption leave.
Death in service
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- The estate of an employee who passes away during employment may be entitled to death-in-service compensation of up to 24 months of the employee’s wages.
Vicarious liability & Discrimination
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- Employers may be held liable for employees’ actions and must implement policies, such as anti-harassment, grievance, disciplinary, and equal opportunities, to prevent unlawful conduct.
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- Pregnancy and maternity will be protected characteristics, and employees facing discrimination, harassment, or victimization may receive remedies, including compensation of up to three years’ wages.
Employees Obligations
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- New obligations include complying with lawful employer instructions, avoiding bribery, serving employers faithfully, and maintaining confidentiality.
Termination of employment and End of service gratuity
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- Minimum notice periods are required, and employers can place employees on ‘gardening leave’ during this time. Employers must promptly cancel visas and cannot condition repatriation on the waiver of employee rights.
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- Clarifications include removing the two-year pay cap and allowing eligible employees to choose a pension or savings scheme in place of gratuity payments.
Why the Employment Regulations 2024 are crucial for employer’s success and compliance?
Understanding and implementing these regulations is vital for ensuring smooth business operations within ADGM. Employers must align their policies, contracts, and workplace practices with the new rules to mitigate the potential risks. This includes updating employment contracts, maintaining accurate records, and enforcing anti-discrimination policies. Non-compliance can lead to severe penalties, including fines and liabilities, with certain violations resulting in penalties of up to six months’ wages.
