Proposed amendments to ADGM Employment Regulations: Key changes and consultation details

The Abu Dhabi Global Market Authority (ADGM) has published a consultation paper on amendments to the ADGM Employment Regulations 2019. If enacted, the new ADGM Employment Regulations are likely to come into force around the fourth quarter of 2024. This article outlines the key proposed changes.

The ADGM Authority's consultation paper, together with the proposed new legislation, is available here.

We have set out below the key changes proposed by the new legislation.

The key changes

Immigration

• The new regulations will introduce the concept of a “Fully Remote Employee”, who will be subject to slightly different rights and obligations.
• Employers will be obliged to cancel an employee’s residence visa and work permit as soon as reasonably practicable following the termination of employment, failing which they will be liable for fines.
• Employers will be expressly prohibited from making the cancellation of an employee’s residence visa and work permit conditional on the employee waiving any of their rights.

Probationary period

• A minimum notice period of one week will apply during an employee’s probationary period.
• An employee may only take vacation during the probationary period with their employer’s approval.
• An employee will only be entitled to one day of paid sick leave per month during their probationary period.
• An employee will be entitled to a repatriation flight if their employment is terminated during their probationary period.

Part-time employment

• The new regulations will introduce the concept of “Part-Time Employee” which will assist employers with calculating leave and other entitlements for employees who do not work full-time hours.

Working hours

• An employee’s working hours will be limited to 48 hours within a 7-day period unless the employee consents otherwise in writing.
• There are no overtime provisions in the new regulations.

Parental leave

• A new mother returning from maternity leave will be entitled to nursing breaks for nine months following childbirth.
• A female employee will have the right to return to work in the same role or a suitable alternative on the same terms and conditions at the end of her maternity leave. 
• The regulations introduce reasonable paid time off for all employees (male and female) who attend ante-natal appointments.
• Maternity and paternity leave will be extended to employees adopting children under six months.

Other leave

• An employee will be entitled to roll over 10 working days of leave into the following leave year, at the end of which it will expire.
• The new regulations contain clearer guidance on how to calculate the different entitlements to leave.
• Employees will be entitled to paid bereavement leave of five working days.
• UAE federal laws governing national service will be expressly stated to apply in the ADGM.

Sick pay

• Statutory sick pay will be reduced to:
  • 100 per cent of the employee's "Daily Wage" for the first 10 working days of sickness absence;
  • 50 per cent of the employee's "Daily Wage" for the following 20 working days of sickness absence; and
  • Unpaid for the remaining 30 days of sickness absence.

Vicarious liability

• The new regulations introduce the concept of vicarious liability, meaning employers may, in certain circumstances, be liable for the acts of their employees.

Discrimination

• Pregnancy and maternity will be a protected characteristic. 
• Specific remedies will be available for employees who experience discrimination, harassment or victimisation, including compensation of up to three years’ basic wages.

Whistleblowing

• Employees who make protected disclosures within the meaning the of the ADGM’s new whistleblowing regime will be protected retaliation.

Termination of employment

• Subject to some exceptions, all employees will be entitled to minimum notice of termination of their employment.
• An employer will be prohibited from unilaterally making a payment in lieu of an employee’s notice period.
• All employees will be entitled to request a written reference and any failure by their employer to comply may result in a financial penalty of one month of wages.
• Employers will be liable for a financial penalty of up to six months’ wages for late payment of an employee’s remuneration (the penalty will operate in a similar way as in the DIFC).

If you have any comments on the new legislation, please contact one of our specialists below by 19 August 2024 so that we can ensure they are considered when the new legislation is finalised.