Knowledge Pack — ADGM Employment Law (Employment Regulations 2024)

Knowledge Pack — ADGM Employment Law (Employment Regulations 2024)

Scope

The Abu Dhabi Global Market (ADGM) is an international financial centre on Al Maryah Island, Abu Dhabi, operating as a distinct common-law jurisdiction within the UAE. Entities incorporated and registered in ADGM are subject to ADGM law exclusively for employment matters — UAE Federal Decree-Law 33/2021 (onshore labor law) does not apply to ADGM employers and employees.

Primary instrument: ADGM Employment Regulations 2024 (superseding the 2019 Regulations), which aligns ADGM employment law with international best practices and closer to UK employment law standards.

Key Employment Principles

ADGM Employment Regulations apply to:

• Employees employed by ADGM-registered entities (onshore in ADGM).
• Both UAE nationals and expatriate employees working in ADGM.
• Part-time and fixed-term employees as well as open-ended arrangements.

Contracts may expand employee rights above the statutory minima; they may not contract out of minimum entitlements.

Contract Types

• Written employment contracts mandatory.
• Parties must agree in writing on key terms: remuneration, working hours, leave entitlements, notice, and role.

Probation Period

• Maximum 6 months.
• During probation: either party may terminate with shorter notice (as agreed or minimum 7 days if not specified).

Working Hours

• Standard: 8 hours/day, 48 hours/week.
• Overtime: additional remuneration or time off in lieu as agreed (no prescribed rate mandated in ADGM Regulations — parties agree).
• Ramadan reduction: applicable per employee's religion as a good-practice expectation; not expressly mandated in ADGM Regulations.

Annual Leave

• Minimum 30 calendar days per year (aligned with UAE onshore standard and higher than UK minimum).
• Pro-rated for partial years.
• Unused leave: employer may require leave to be taken at specific times; carry-forward subject to contract; payment in lieu on termination.

Public Holidays

• ADGM recognizes UAE federal public holidays; specific days vary by year.
• Employees working on public holidays entitled to time off in lieu or additional pay.

Sick Leave

• Up to 60 days per year (typically: first 30 days fully paid; next 30 days half-pay; beyond: unpaid or contract terms).

Maternity, Paternity, and Parental Leave

• Maternity leave: minimum 60 days paid (employer continues basic salary).
• Paternity leave: minimum 5 days paid.
• Enhanced rights may be provided by contract.
• Employer may not dismiss an employee on maternity leave or within 6 months of return.

Notice Periods

• Minimum notice (open-ended contracts): typically 30 days (confirm against Regulations 2024 for exact minimum — may scale with tenure).
• Parties may agree longer notice.
• Notice may be worked or paid in lieu.
• No-notice termination permitted for gross misconduct (see below).

Termination: Without Cause

• Either party may terminate with contractual notice (or payment in lieu).
• Employer must have a fair reason (related to conduct, capability, or business need) — ADGM Regulations include unfair dismissal protection.
• Employees with 1+ year of service gain unfair dismissal protection.

Termination: Gross Misconduct

Immediate termination without notice or gratuity for:

• Theft, fraud, or dishonesty
• Serious breach of confidentiality
• Physical violence / harassment
• Willful damage to employer property
• Serious safety violations
• Other conduct fundamentally incompatible with continuation of employment

Procedural fairness recommended: investigation, notice of allegations, opportunity to respond.

Workplace Savings Plan (ADGM WSP) — End of Service

ADGM has replaced the traditional end-of-service gratuity with the ADGM Workplace Savings Plan:

• Employer makes monthly contributions to an individual employee savings account.
• Contribution rate: minimum 12.5% of monthly basic salary (or such rate as prescribed by Regulations).
• Contributions vest immediately and are portable.
• Employee retains funds on termination for any reason.
• Providers are ADGM-registered financial institutions.
• This replaces the legacy lump-sum gratuity on resignation/termination calculation.

Non-Compete Clauses

• Enforceable post-termination if:
  • Reasonable in duration (typically 6–12 months; courts narrow excessive periods)
  • Reasonable in geographic scope (linked to employer's actual business area)
  • Reasonable in activity scope (no broader than necessary to protect legitimate interests)
• ADGM Courts apply common-law restraint-of-trade principles — UK case law is highly persuasive.
• Garden leave clauses common and enforceable.

Discrimination and Harassment

• ADGM Regulations prohibit discrimination on grounds of gender, race, religion, nationality, disability, pregnancy/maternity, and age.
• Sexual harassment: separate explicit prohibition.
• Employer must implement workplace harassment and grievance procedures.
• Employees may bring claims before ADGM Courts.

Dispute Resolution

• Disputes first submitted to ADGM Employment Tribunal (accessible, low-cost procedure).
• Appeal to ADGM Court of First Instance and ADGM Court of Appeal.
• ADGM Courts apply ADGM law; common-law principles including English case law as persuasive authority.
• No mandatory conciliation stage (unlike UK ACAS), but ADR encouraged.

Comparison: ADGM vs DIFC vs UAE Onshore

Caveats & Currency

The ADGM Employment Regulations 2024 are recent; verify the current version and any ADGM Registration Authority guidance before advising. WSP contribution rates and provider lists are subject to ADGM updating. ADGM Courts' common-law jurisprudence is developing; English authorities are persuasive but not binding.

Related Skills

• [[kb-employment-law-difc]]
• [[kb-employment-law-uae]]
• [[kb-data-privacy-uae-pdpl]]
• [[draft-employment-contract]]
• [[draft-nda-mutual]]