The New ADGM Employment Regulations – what you need to know

Our MEA employment team have advised the Abu Dhabi Global Market (ADGM) Authority on the Employment Regulations 2025, which will come into force on 1 April 2025.

A consultation paper on replacing the ADGM Employment Regulations 2019 was announced in July 2024. However, the new ADGM Employment Regulations 2025 contain significant amendments to the draft law which was issued as part of the initial consultation. 

Employers who fail to prepare for the changes introduced by the new ADGM Employment Regulations are exposing themselves to fines and other potential liabilities.

We have set out below the key changes.

The key changes

Application

• The new ADGM Employment Regulations will not apply to employers which hold a dual licence issued by the Abu Dhabi Department of Economic Development and whose employees are governed by the UAE federal labour law.

Remote Employees

• The new ADGM Employment Regulations introduce the concept of a “Remote Employee”, who will be subject to slightly different rights and obligations to “normal” employees.
• Remote Employees who do not reside and work in the United Arab Emirates (UAE) do not require a UAE residence visa or ADGM work permit.

Immigration 

• Employers will be obliged to cancel an employee’s residence visa and/or work permit as soon as reasonably practicable following the termination of the employee’s employment, failing which they will be liable for fines.
• Employers will be expressly prohibited from making the cancellation of an employee’s UAE residence visa and/or work permit conditional on the employee waiving any of their rights.

Employment Contracts

• An employer must provide an employee with a written employment contract which meets the criteria set out in the new ADGM Employment Regulations within one month of the commencement of the employee’s employment.
• Any non-administrative amendment to an employment contract must be agreed in writing by both the employer and the employee.

Probationary period

• An employee’s probationary period cannot be longer than six months or, if the employee is employed on a fixed-term contract which is less than six months, it cannot be longer than half the length of the term of the employment contract.
• A minimum notice period of one week will apply during an employee’s probationary period.
• An employee may only take annual leave during the probationary period with their employer’s approval.
• An employee will be entitled to sick leave, but not sick pay, during their probationary period.
• An employee will be entitled to a repatriation flight if their employment is terminated during their probationary period, regardless of the reason for termination.

Part-time employment

• The new ADGM Employment Regulations introduce the concept of a “Part-Time Employee” which will assist employers with calculating leave and other entitlements for employees who work a reduced week.

Employment records

• The new ADGM Employment Regulations clarify an employer’s obligation to maintain employment records.

Working hours

• An employee’s working hours will be limited to 48 hours in a seven calendar day period unless the employee consents otherwise in writing.
• Muslim employees will be entitled to a 25 per cent reduction in their normal working hours during Ramadan, with no consequential reduction in pay. 
• There are currently no specific overtime provisions in the new ADGM Employment Regulations (although it is anticipated that the Registry will issue further rules or guidance on overtime in due course).

Parental leave

• A new mother returning from maternity leave will be entitled to a nursing break of not less than one hour (in aggregate) per day for nine months following childbirth.
• A female employee will have the right to return to work in the same role or a suitable alternative role on substantially the same terms and conditions at the end of her maternity leave.
• Employees (male and female) will be entitled to reasonable paid time off work to attend ante-natal appointments.
• Maternity leave will be extended to (i) employees who adopt children under five years; and (ii) employees who give birth to a stillborn baby or suffer a miscarriage after the start of the 24th week of their pregnancy. 

Other leave

• An employee will be entitled to roll over five days of annual leave into the following leave year, at the end of which it will expire.
• An employer must not unreasonably refuse an employee’s request to take annual leave.
• An employer may require an employee to take annual leave by giving them seven days’ written notice.
• The new ADGM Employment Regulations contain 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.

Death in service

• The estate of employees who pass away in the course of their employment may be entitled to death in service compensation of up to 24 months of the deceased employee’s wages.

Vicarious liability

• Employers may, in certain circumstances, be vicariously liable for the acts of their employees. 
• It is crucial that employers implement and comply with appropriate policies and procedures, such as an anti-harassment and bullying policy, grievance policy, disciplinary policy and equal opportunities policy, to demonstrate they have taken reasonable steps to prevent employees from engaging in unlawful conduct. 

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’ wages.

Obligations on employees

• Employees will be required to comply with a number of new statutory obligations including (i) a requirement to comply with the lawful and reasonable instructions of their employer; (ii) an obligation not to engage in bribery and corruption; (iii) an obligation to serve their employer faithfully; and (iv) an obligation not to disclose their employer’s confidential information.

Termination of employment

• All employees employed on unlimited employment contracts will be entitled to minimum notice of termination of their employment.
• An employer will have a statutory right to place an employee on garden leave for all or part of their notice period.
• 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 written reasons for their dismissal. Any failure by their employer to comply may result in a fine.
• 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, but not exactly the same, way as in the Dubai International Financial Centre (DIFC)).

End of service gratuity

• The new ADGM Employment Regulations clarify the rules relating to the calculation of an employee’s end of service gratuity (which include the removal of the cap of two years’ pay).
• All eligible employees will be entitled to be paid an end of service gratuity on the termination of their employment regardless of the reason for termination.
• An employer may give an employee the option of participating in a pension or savings scheme as an alternative to receiving an end of service gratuity.

UAE/GCC nationals’ pension

• Employers must enrol eligible UAE/GCC nationals in the applicable pension scheme within 30 calendar days of the commencement of the employee’s employment.

Repatriation flight

• An employer must provide eligible employees with a repatriation flight within 30 calendar days of their termination date.
• Employees will not be entitled to a repatriation flight in a number of scenarios, which include if the employee’s employment has been terminated for cause by their employer.

Settlement agreements

• Employees will only be able to waive rights under the new ADGM Employment Regulations by entering into a binding settlement agreement which meets specific criteria.

If you would like further information or advice on the new ADGM Employment Regulations, please contact Sara Khoja or Ben Brown. 

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