Key Changes in ADGM Employment Law

The Abu Dhabi Global Market (ADGM) has further demonstrated its commitment to fostering a progressive and business-friendly environment with the introduction of the Employment Regulations 2024 (“New Law”), set to take effect on 1 April 2025. Replacing the Employment Regulations 2019 (as amended) (“Old Law”), the New Law introduces a series of key reforms aimed at elevating workplace standards, providing greater clarity and guidance for both employers and employees, and ensuring alignment with international best practices. These changes underscore ADGM’s focus on cultivating a modern, transparent, and globally competitive regulatory framework for employment.

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Waiver of Employee Rights

A notable update under the ADGM Employment Regulations 2024 is the clarification and formalization of the waiver of employee rights. While the Old Law allowed employees to waive rights through a settlement agreement, the New Law introduces specific additional safeguards to enhance transparency and fairness:

• Scope of waiver: Any waiver can only cover claims or potential claims arising from facts or circumstances that pre-date or exist at the date of the agreement.
• Employee warranty: The employee must warrant in the agreement that they have had the opportunity to seek independent legal advice regarding the terms and effect of entering into the agreement.

These additions ensure that waivers are executed with fully informed consent, reducing the likelihood of future disputes and aligning ADGM practice with international best standards for workplace fairness.

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Work Permits and Visa Cancellations

The New Law also strengthens provisions regarding employer responsibilities for work permits and visa cancellations. Employers are required to apply for an employee's work permit before the employee commences employment and are explicitly prohibited from demanding or accepting any payment from the employee to cover permit-related costs. This provision ensures that employees are not unfairly burdened with expenses that fall under the employer’s obligations.

Additionally, the law prohibits employers from conditioning the cancellation of an employee’s visa on the waiver of any rights or claims. Penalties are introduced for employers failing to comply with these regulations, reinforcing the ADGM's commitment to fair labor practices.

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Employment Contract Amendments

The New Law introduces a key amendment regarding changes to employment contracts. While amendments still require written consent from both parties, the law now includes an exception for purely administrative changes. Employers must document such changes and notify employees in writing before they take effect, thus balancing flexibility with the need for transparency and compliance.

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Probationary Periods

The New Law provides additional structure and clarity around probationary periods. It specifies that a probation period cannot exceed half the duration of the employment contract when the contract term is six months or less. Additionally, employees on probation are entitled to take leave and sick leave, albeit without pay. These provisions aim to offer fair treatment while allowing employers to assess an employee’s suitability for the role.

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Part-time and Remote Work

Recognizing the evolving nature of the workplace, the New Law introduces provisions for part-time and remote work. Part-time employees are entitled to benefits and leave on a pro-rata basis, ensuring equitable treatment for those working fewer hours. For remote employees, including those in hybrid roles, employers are required to provide necessary technical equipment to perform their duties effectively.

The law also distinguishes between remote employees working in the UAE and those based abroad, tailoring requirements to their specific circumstances. These updates reflect ADGM's forward-thinking approach to modern work arrangements, ensuring that employee rights are safeguarded even in flexible work environments.

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Termination and Payment After Termination

Under the ADGM Employment Regulations 2024, the timeframe for employers to settle outstanding wages and other amounts following termination has been extended from 14 days under the Old Law to 21 calendar days. This extension applies to all payments, excluding variable components such as bonuses or commissions.

To ensure timely payment, the New Law introduces a penalty equal to the employee’s daily wage for each calendar day of delay, reinforcing ADGM’s commitment to prompt and fair settlement of employees’ entitlements.

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Maternity and Parental Leave

The ADGM Employment Regulations 2024 introduce progressive updates to maternity and paternity leave, underscoring ADGM’s commitment to supporting employees during significant life events. Key updates include:

• Maternity leave and nursing breaks: Employees returning from maternity leave are entitled to at least one nursing break of no less than one hour during the working day.
• Adoption and expanded maternity rights: Maternity rights now extend to employees adopting a child under five years old, compared with the previous limit of three months.
• Support following miscarriage or stillbirth: Employees who experience a miscarriage or stillbirth after the 24th week of pregnancy are entitled to maternity rights, ensuring protection during these challenging circumstances.
• Expanded paternity leave: Male employees are now eligible for paternity leave following the birth of a child or the adoption of a child under five years old, fostering an inclusive approach to parental rights that supports fathers in both biological and adoptive contexts.

These updates reflect ADGM’s dedication to a modern, equitable workplace, recognizing the importance of family support and employee well-being.

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Antenatal Care and Adoption-Related Leave

The ADGM Employment Regulations 2024 introduce a new entitlement allowing employees to take reasonable time off during working hours for antenatal care and adoption-related proceedings:

• Antenatal care: Employees who are pregnant or whose spouse is pregnant may now take reasonable time off to attend prenatal care appointments. To exercise this right, employees must provide reasonable advance notice and, if requested, submit a medical certificate confirming the pregnancy and evidence of the appointment.
• Adoption proceedings: Employees applying to adopt a child are now entitled to take reasonable time off to attend adoption-related proceedings, subject to providing reasonable notice and meeting any evidential requirements reasonably requested by the employer.

This new provision reinforces ADGM’s commitment to supporting employees in balancing work responsibilities with personal and family commitments, providing explicit protection for antenatal and adoption-related time off.

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Compensation for Work-Related Injuries

Under the ADGM Employment Regulations 2024, a key update concerns the determination of compensation for work-related injuries and illnesses. Whereas such compensation was previously set by the Board, the New Law now vests this authority with the courts, allowing for a case-by-case assessment tailored to the specific circumstances of each claim. The New Law also introduces a newly established fines scale, reinforcing overall accountability and compliance under the regulations.

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Non-Discrimination, Victimization, and Protected Disclosures

The ADGM Employment Regulations 2024 introduce several important updates to strengthen protections for employees against discrimination, victimization, and retaliation.

• Age Discrimination: Under the Old Law, employers could treat employees differently based on age if the disadvantage was linked to shorter length of service or if it fulfilled a business need. Under the New Law, such treatment is only justified if it is a proportionate means of achieving a legitimate aim, aligning ADGM with international best practice.
• Court Remedies for Discrimination: Employees who face discrimination may apply to the Court for a declaration to that effect. The Court has the authority to:
• Order the employer to pay compensation, up to a maximum of three years’ wages, and
• Require the employer to take steps to correct or mitigate the adverse impact on the employee.
• Victimization and Protected Disclosures: Employees are explicitly protected from retaliation or any detriment when exercising their rights, making complaints, giving evidence, or raising protected disclosures. The Court may order compensation and/or remedial measures to ensure employees are protected and employers are held accountable.

These updates provide a clearer, stronger, and more enforceable framework for protecting employees, ensuring workplaces within ADGM are fair, transparent, and accountable.

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Compliance and Enforcement

The ADGM Employment Regulations 2024 strengthen the procedural framework for addressing employer non-compliance by clearly defining the steps for investigations, issuance of notices, and referrals to the ADGM Courts. The New Law also introduces a clear fines scale, providing transparency on penalties for breaches and reinforcing employer accountability. This structured approach ensures that disputes are resolved efficiently and fairly, while promoting compliance, transparency, and accountability in the workplace, safeguarding employees’ rights and maintaining trust in the ADGM regulatory framework.

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Conclusion

As the ADGM reinforces its position as a leading global financial hub, these reforms highlight its commitment to fostering a balanced, transparent, and supportive work environment. For both employers and employees, the New Law represents a significant step toward a workplace culture that emphasizes fairness, respect, and shared accountability. Staying informed of these changes and adapting practices accordingly will be essential for successfully navigating this new era of employment regulation.

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