New ADGM employment rules introduce flexible work and stronger employee rights – Five key changes

Dubai: Abu Dhabi Global Market (ADGM) has rolled out new employment regulations that bring major changes to workplace practices, including flexible work arrangements, enhanced employee protections, and stricter compliance requirements for employers.

The Registration Authority of Abu Dhabi Global Market (ADGM), the international financial centre of Abu Dhabi, announced the new employment regulations for individuals employed under its jurisdiction earlier this year.

The updated rules, which took effect on April 1, aim to modernise employment law within ADGM and align it with global standards, offering clearer guidance on the rights and responsibilities of both employers and employees.

One of the most significant updates is the formal recognition of flexible work arrangements, including the introduction of ‘part-time employee’ and ‘remote working employee’ concepts.

“The new ADGM law exempts employers from certain obligations in relation to remote workers (employees whose normal place of work is not the employer’s premises in ADGM),” explained Aqsa Khan-Sadiq, Senior Associate at Baker McKenzie, in an interview with Gulf News.

This shift marks a major step towards accommodating modern work practices and ensuring both employees and employers understand their evolving responsibilities.

The regulations also establish specific obligations for employees, such as performing their duties with reasonable diligence and care, complying with their employer’s reasonable instructions, and refraining from disclosing confidential information.

Moreover, employers may now be held vicariously liable for acts, attempted acts, or omissions of their employees in certain circumstances. “For example, an employer could be liable for discrimination, harassment, or victimisation if it cannot demonstrate that it took reasonable steps to prevent such conduct. Pregnancy and maternity have now been explicitly included as protected characteristics for the purpose of discrimination claims,” Sadiq explained.

In cases of successful discrimination or victimisation claims, ADGM Courts may award compensation of up to three years of the employee’s total salary, which could represent a significant liability for employers.

The maximum working week remains capped at 48 hours, but now employees must provide written consent if asked to work beyond this limit. According to Sadiq, while employees may be entitled to overtime pay, the regulations do not yet specify how overtime will be handled. The legislation indicates that further guidance on this matter will be provided by the Registrar.

In a major win for Muslim employees, the regulations confirm that during Ramadan, employees are entitled to a 25 per cent reduction in normal working hours, without any reduction in their wages.

“This means that working hours in Ramadan will be reduced in proportion to the actual hours worked by an employee, which is a sensible approach,” she said.

The new regulations provide enhanced maternity benefits. “Female employees who adopt a child under five years old or who give birth to a stillborn baby or suffer a miscarriage after the 24th week of pregnancy are entitled to maternity leave and pay,” she noted.

New mothers will also benefit from an additional one-hour break for nine months following the birth of their child.

“Furthermore, employees are entitled to five working days of bereavement leave in the event of the death of a spouse, parent, child (including adopted children), or sibling. This leave must be utilised within one month of the bereavement,” Sadiq said.

While the end-of-service gratuity calculation method remains unchanged, the two-year cap on the gratuity amount has been removed, providing additional financial incentive for long-serving employees.

“In a move that offers more choice, ADGM employees can now opt to participate in a savings scheme instead of the traditional gratuity scheme. This gives employees more flexibility in managing their end-of-service benefits,” Sadiq stated.

Employers who fail to comply with the new regulations may face financial penalties. These include, but are not limited to:

“Employers who do not comply with certain obligations may face the risk of penalties and fines,” Sadiq said.