Employment matters: Proposed amendments to the employment laws in the ADGM

This is the first in our three-part mini series focussing on the employment law landscape in the Abu Dhabi Global Market (“ADGM”). Part one discusses the proposed amendments to the ADGM Employment Regulations 2019. Part two will focus on the new Whistleblower Protection Regulations 2024 and part three will address other employment related considerations for  employers operating working in the ADGM.

Introduction

The ADGM Registration Authority (“RA”) has published a consultation paper on proposed amendments to the Employment Regulations 2019 (the “Regulations”). We summarise the main proposed changes below which, if approved, are likely to come into effect later this year.

Probationary periods

The proposed amendments provide clarification in relation to what entitlements an employee on probation will have – they include clarity that an employee on probation:

• may take annual leave during the probationary period if agreed by the employer;
• is entitled to one day of paid sick leave each month;
• is entitled to receive a repatriation flight on the termination of their employment (unless they join another employer in the UAE or their employment was terminated for cause); and
• is not entitled to family leave entitlements during probation. We anticipate that there may be further clarification in relation to this proposed amendment particularly in relation to maternity leave to perhaps confirm that leave may be taken but no pay will due.

HR actions (if proposals enacted): HR teams should monitor these proposals closely to ensure teams are aware of which proposals are actually enacted so as to then i) determine your organisations approach to annual leave requests during probation; ii) update internal processes in relation to probation in relation to a) annual leave, b) sick pay entitlement, c) repatriation flights, and d) family related rights.

Employment contracts and records

• Employers will now also be required to retain a copy of the employee’s passport as part of the employment records.
• Employment contracts will have to confirm that they are governed by the laws of the ADGM and that any disputes which may arise will be subject to the jurisdiction of the Courts in the ADGM.
• It appears from the draft regulations that there may now also be a requirement short-term employment (of 30 days or less) to also be governed by an employment contract although we hope that additional clarification will be provided in relation to this.

HR actions (if proposals enacted): ensure that obtaining and retaining a copy of each employee’s passport is part of the onboarding process (and that this is only retained for as long as is necessary); update employment contracts to be issued to address the governing laws and jurisdiction if they do not already align with the above and (if you do engage short-term workers) put in place employment contracts.

Remote employees

The proposed amendments introduce three categories of remote employees which are not subject to certain regulations (for example health and safety in the workplace considerations) as follows:

• Fully Remote Employee – an individual who resides either inside or outside of the UAE, and works under an employment contract under which the employee’s place of work is not at the employer’s premises within the ADGM,
• Overseas Fully Remote Employee – a fully remote employee who does not reside in the UAE , and
• UAE Fully Remote Employee – will require a UAE residence visa, Emirates ID/identity care and work permit.  They may be able to comment work before the work permit is issued

HR actions (if proposals enacted): consider necessary changes to employment contracts, ensure policies and internal processes align to new requirements, including the immigration related requirements for each.

Family-friendly and leave related changes

The draft regulations include the following maternity / adoption related proposed changes:

• Maternity leave rights applicable to female employees adopting a child of six months old or less (this is currently only applicable to adopted children aged three months or less);
• Introduction of nursing breaks for returning female employees (at least one break of one hour for up to nine months after the date of childbirth);
• Confirmation that if an employee is dismissed during maternity / adoptive leave that they will be paid the maternity pay they would otherwise have enjoyed; and

Other proposed leave changes:

• Introduction of paternity leave for father’s of five working days to be taken within two months of the child’s birth or adoption,
• Introduction of five days bereavement leave; and
• Increase in the number of days annual leave which may be carried over from one holiday year to the next from five days to 10 days (which then must be used within 12 months).

Extended discrimination protections

The following proposed amendments have been added

• pregnancy and maternity are expressly identified as protected characteristics; and
• victimisation has been added as a protected type of discrimination - that is the prohibition of subjecting an employee to a detriment because they have done one of the protected acts namely issuing proceedings of discrimination, or giving evidence in relation to such proceedings or doing anything else for the purpose of making an allegation of discrimination.

HR action (if proposals enacted): training for HR and managers and updating of internal policies and procedures.

Vicarious liability

• The proposals add confirmation that an employer may be liable for any act, attempted act or omission of an employee done in the course of their employment with the employer

HR action (if proposals enacted): ensuring all internal policies are up to date and address acceptable manners of behaviour, and ensuring that adequate training is delivered to all employees and managers so as to provide the employer with the reasonable steps defence.

End of service gratuity entitlement

• The proposals remove the current waiver of an employee’s entitlement to end of service entitlement (“EOS”) if the employee is dismissed for cause.  This would mean that EOS is payable to eligible expatriate employees regardless of the reason for the dismissal.

HR action (if proposals enacted): ensure payroll team are aware of the change and that the business is informed of this change in approach from a cost of termination perspective.

Waiver of claims

• The proposed amendments explicitly confirm that that any waiver of an employment claim only waives claims existing at the time of the agreement being signed.

HR action (if proposals enacted): revise template settlement agreements to also include a reaffirmation agreement to be signed on, or shortly after, the termination of employment.