The Dynamic Landscape of Employment Law in the ADGM: The Impact of the Whistleblower Protection Regulations 2024

The Abu Dhabi Global Market (ADGM) enacted new regulations to protect whistleblowers. The regulations are designed to protect employees who report misconduct and promote ethical corporate behaviour

Employers who are not up to speed and compliant with the new whistleblowing regulations, part of which came into force in July 2024 risk incurring significant fines and potential litigation which can be expensive, time consuming for management and reputationally damaging.

Whistleblowing

The new Whistleblower Protection Regulations apply to all ADGM entities and afford legal protection to whistleblowers. Some of their provisions came into force on 5 July 2024.

This is a meaningful change, as the Regulations formally introduce whistleblower protection into the ADGM employment framework, (whereas previously there was only non-binding guidance in place), and set out requirements on ADGM entities to have appropriate and effective policies and procedures.

What are ‘Protected Disclosures’?

There are three key elements to what constitutes a ‘Protected Disclosure’:

1. The disclosure must relate to knowledge or a reasonable suspicion that an ADGM entity, or one of its officers, employees or agents has, or may have contravened, or is likely to contravene an “Applicable Law” – which means any provision of any ADGM Regulations, or any other laws administered by the Registrar, the Financial Services Regulator or any other Global Market Authority. A protected disclosure must be a disclosure of information, rather than simply voicing a concern or raising an allegation.
2. The information must have been disclosed in good faith, i.e. the person making the disclosure should be acting with an honest motive. A claimant would not be acting in good faith where their motivation for disclosing information was not directed to remedying the wrongs identified, but rather an ulterior motive such as damaging someone’s reputation or seeking a financial reward.
3. The information must have been disclosed to a director, officer or person in a management position at the relevant ADGM entity, or a person designated to receive protected disclosures (e.g., a whistleblowing officer, the entity’s registered auditor or other external parties, such as the Registrar or a criminal law enforcement agency.)

The Regulations also enable those making protected disclosures to do so anonymously. A person who makes a Protected Disclosure does not need to identify themselves to qualify for protection. However, in practical terms, if an employee does not identify themselves when making a disclosure, it will be difficult for an employer to ensure that they are not subjected to detrimental treatment, but it is also less likely that they will be subjected to detrimental treatment, if others are not aware that they “blew the whistle”.

Whistleblowing policies should make it clear that information related to personal grievances, concerning an employee’s own circumstances, are unlikely to fall within the scope of a ‘protected disclosure’ and employees should refer to their employer’s grievance policy to raise such complaints instead.

How do the Regulations protect whistleblowers?

The Regulations expressly protect whistleblowers from:

1. being subjected to any civil or contractual liability;
2. having a contractual, civil, or other remedy or right enforced against them for making the Protected Disclosure; and
3. being dismissed from their current employment or subjected to detrimental treatment.

This last point mirrors the protection of whistleblowers under English law. Employees cannot be dismissed because they have made a protected disclosure and they should not be subjected to any detrimental treatment such as demotion, withholding a pay-rise or bonus, or being excluded or ostracised from the team.

An employee who considers that they have been dismissed or subjected to detrimental treatment for having blown the whistle can bring a claim for relief. We have not seen any whistleblowing cases come before the ADGM court yet, however we expect that the employee would claim compensation for loss of earnings because of their dismissal or losses stemming from their detrimental treatment – as well as for “Injury to Feelings”.

We have also not seen any cases in the ADGM where compensation for injury to feelings has been sought, but we assume that the amount awarded will depend on the seriousness of the detrimental treatment and the effect on the employee.

Protection from dismissal or detrimental treatment for employees who make a protected disclosure was effective from the date the Regulations came into force, on 5 July 2024.

Compliance and Implementation – next steps

The requirements in relation to the arrangements which an ADGM entity must have in place in respect of whistleblowing will come into force on 31 May 2025.

Employers’ current whistleblowing arrangements should be reviewed with reference to the Regulations to ensure compliance ahead of the end of May this year.

In summary, the Regulations require an ADGM entity to implement and maintain appropriate and effective arrangements to:

• facilitate persons making Protected Disclosures, e.g., an effective whistleblowing policy and procedure which is easily accessible and understood by employees. Employers should provide adequate training to ensure that employees are aware of their rights and protections under the Regulations; and
• ensure they have a robust system for handling Protected Disclosures, including assessing and escalating relevant disclosures, which also protects effectively the identity of persons who make protected disclosures.

These arrangements, written policies and procedures must be kept under regular review and up to date.

The Regulations also require records relating to protected disclosures to be maintained for at least six years from the date on which all matters relevant to the protected disclosure are completed and closed.

The Regulations grant the ADGM Registrar the power to issue censures, impose financial penalties, and/or suspend or withdraw licenses for contraventions of the Regulations. Failure to comply could therefore have serious consequences which could impact adversely an employer’s operational capability and reputation.