The Dynamic Landscape of Employment Law in the ADGM: Key Changes to the ADGM Employment Regulations

The Abu Dhabi Global Market (ADGM) has introduced significant changes to its Employment Regulations, effective from 1 April 2025 (the New Employment Regulations). Employers are required to align their internal policies and employment contracts with the New Employment Regulations.

The changes are designed to enhance worker protections and provide greater clarity for employers and employees within the ADGM.

The New Employment Regulations cover several areas of employment law, including the following important key changes of which all ADGM employers should be aware.

Employees: The definition of ‘Employee’ has been amended to be less restrictive. It now enables employers to hire full time remote employees based outside the ADGM and allows for more flexible working arrangements, as the previous definition of an ‘Employee’ under the Regulations required the person to hold an ADGM work permit and be based within or ordinarily working within or from the ADGM.

Employment Contracts and Probationary Periods: Employers must issue written employment contracts within one month of an employee’s start date and set a maximum probationary period of six months. Contracts must be in English and any amendments to employment contracts must be agreed in writing by both parties, except for minor administrative changes.

Part-time Working: Clarification of the definition of part-time employment (which is now defined) and the rights of part-time employees, including in respect of leave and benefits which should be pro-rated for employees who work less than 5 working days per week. 

Probationary Periods: Clarification of an employee’s entitlements during the probationary period. An employee on probation is:

• not entitled to paid ante-natal leave or maternity leave;
• entitled to a one way repatriation flight, except where the employee is resigning to join another employer in the UAE;
• entitled to one day’s sick leave (unpaid) per month of probation;
• entitled to leave, subject to the employer’s approval; and
• A minimum notice period of one week’s written notice applies during probation.

Vicarious Liability: Clarification that employers can be vicariously liable for acts of their employees in the course of their employment, particularly in relation to discrimination and harassment. This is already the position under common law, but it has been made clear in the Regulations and there will be a defence (as is the case under English law) in the case of discrimination, harassment, or victimisation if the employer can show that it took reasonable steps to prevent the harassment, discrimination or victimisation from occurring.

Overtime: Overtime provisions have been removed from the Regulations, meaning the entitlement and calculation of overtime pay will be left to employers and employees to agree.

Protected Characteristics: Colour has been removed as a protected characteristic, but pregnancy and maternity have been introduced as protected characteristics. However, it was already prohibited under the previous Regulations to dismiss an employee or change their position or conditions of employment without consent because of their pregnancy, maternity leave or paternity leave.

Victimisation: The concept of ‘victimisation’ has been introduced into the discrimination provisions of the Regulations.  Victimisation occurs when an employee is treated differently or unfairly because they have taken action to address discrimination or carried out a ‘protected act’.  Employers are prohibited from subjecting employees to such detriment or dismissal.

A ‘protected act’ covers any form of involvement with the discrimination legislation, including making a discrimination complaint or giving evidence in discrimination proceedings or internal investigations regarding allegations of discrimination. 

Employees who allege that they have been discriminated against, harassed, or victimised can seek a declaration to that effect from the court and compensation of up to 3 years’ wages, which can include an amount in respect of the employee’s losses as a result of the discrimination (which would be relevant where the alleged discrimination was a dismissal, but also compensation for missing out on a promotion or not receiving or receiving a reduced bonus) and also an amount in respect of “injury to feelings which is compensation for non-financial losses considering the effect the discriminatory treatment had on the claimant (such as hurt, distress caused or in more serious cases significant mental ill-health).

Family Leave: the introduction of a 12-week qualifying period for maternity pay, the right to paid nursing breaks, paternity leave for adoptive fathers, paid time off for adoption-related appointments and 5 days’ paid bereavement leave in the event of the death of a spouse, parent, child, or sibling.

Termination for Cause: An employer can terminate for cause employees who are absent without authorisation.

Payment in lieu of notice: Employers are prohibited from unilaterally making a payment in lieu of notice to terminate employment, without the employee’s written consent. The employee’s written consent must be obtained at the point of or after notice has been given by either the employer or the employee. Therefore, employers will not be able to rely on a payment in lieu of notice clause contained in the employee’s employment contract.  Employers should therefore ensure that their employment contracts contain a garden leave clause, if they want to have the flexibility to prevent employees from working out their notice period.

End of Service Gratuity: An end of service gratuity payment is payable, even where the employee is terminated for cause. This is to offer financial security in these circumstances more akin to a “pension scheme”.

Certificate of Experience: employees have the right to request a “certificate of experience”, setting out the name of the employer, name of the employee, term of employment, last position held by the employee, and the employee’s salary as at their leaving date. Where the employer fails to provide the certificate within the required time limit of 14 days of the request or fails to provide a true and accurate certificate, the employer will be liable to pay the equivalent of one months’ wages to the employee.

Visa-related costs: Employers are prohibited from charging employees for visa-related costs, including cancellation fees.