The Abu Dhabi Global Market (“ADGM”) has recently issued the new Employment Regulations 2024, which will take effect on 1 April 2025, introducing significant changes to employment standards for ADGM licensees. The updated regulations include provisions for part-time and remote workers, as well as additional provisions to clarify employers’ obligations and improve worker’s protections. Businesses operating in ADGM must review these new legal requirements and update their emplyoment practices accordingly.
1. What are some of the key changes in the ADGM Employment Regulations 2024?
The new Employment Regulations 2024 introduce several important up-dates, with the most notable being the inclusion of part-time and remote employees. Part-time employees are de-fined as individuals:
- Whose working hours, as outlined in their employment contract, are less than eight hours per working day;
- Who work fewer than five working days per week; or
- Whose terms of employment do not otherwise constitute full-time working under the employer’s standard practices.
The new regulations distinguish bene-fits, such as different types of leave, sick pay and parental pay, for part-time employees based on the number of days they work per week. Employees working fewer than five days per week will have benefits calculated on a pro-rata basis, while those working every day of the employer’s working week will be entitled to full benefits.
Additionally, remote employees are now formally recognized in the new regulations, defined as individuals:
- Who reside either inside or outside the UAE, and
- Whose normal place of work is not on the employer’s premises in ADGM.
The regulations distinguish between remote employees working in the UAE, either fully remotely or in a hybrid arrangement (working at the employer’s premises alongside other agreed locations), and those residing and working outside the UAE. Remote employees working abroad are exempt from the requirement to obtain an employment visa and work permit from ADGM.
2. What are some of the new responsibilities for employers?
The updated employment framework builds on previous regulations, reaffirming that employers are responsible for covering the costs for work permits, UAE residency visas and identity cards. It clarifies that employers must obtain or have applied for a work permit before the employee begins work. Additionally, the regulations explicitly prohibit employers from seeking reimbursement for these expenses and require prompt cancellation of visas and work permits after termination, with fines for non-compliance.
In line with these updates, the new regulations impose stricter requirements for amendments to employment contracts. All amendments must be in writing and signed by both the employer and employee. For administrative changes, the employer must document the amendment and notify the employee before it takes effect. This approach strengthens the previous regulations, which only required written amendments signed by the employee if they were not to the employee’s benefit.
The updated regulations allow employees to exceed the previously stat-ed 48 hours in a seven-calendar day period, but only with the employee’s written consent, which was not ad-dressed in the old regulations. The regulations also state that employees may be entitled to overtime pay for any hours worked beyond the maxi-mum weekly limit in line with rules or guidance that are later expected from the ADGM Authority.
Additionally, the new regulations grant Muslim employees a 25 % reduction in working hours during Rama-dan with no reduction in pay, where-as the old regulations allowed a two-hour reduction in working hours per day.
The regulations also recognize pregnancy and maternity as protected characteristics. Companies found dis-criminating on these grounds may be required to pay up to three years’ wages in compensation to the affected individual.
Furthermore, the regulations introduce provisions regarding employer liability for employee conduct. Employers may be held vicariously liable for an employee’s actions if these are connected to their duties. However, employers can avoid liability by demonstrating that they took reason-able steps to prevent such actions, particularly in cases of discrimination, harassment or victimization.
3. How have Probation Periods and End-of-Service gratuity changed?
The new regulations introduce clearer standards and stronger protections for probation periods. While the maximum probation period remains six months, it cannot exceed half the du-ration of fixed-term contracts shorter than six months. During probation, employees may only take annual leave with employer approval, and although they are entitled to sick leave, it will remain unpaid.
A key improvement is the guaranteed entitlement to a one-way repatriation flight for employees whose employment is terminated during probation, regardless of the reason.
One of the most significant changes in the new regulations is the removal of the restriction on end-of-service gratuity for employees terminated for cause. Previously, such employees were not entitled to gratuity, with cause defined as conduct warranting immediate dismissal by a reasonable employer. The new regulations eliminate this restriction, ensuring all eligible employees are entitled to end-of-service gratuity upon termination, regardless of the reason. This change aligns with the latest UAE Federal La-bour Law.
In addition, employers now have the option to offer pension or savings schemes as an alternative to end-of-service gratuity, providing employees with additional financial planning options.
4. What are the new provisions for termination of employment?
The updated regulations introduce new provisions regarding the termination of employment, entitling all employees on unlimited contracts to a minimum notice period of seven calendar days if the employee’s period of continuous employment with the employer is less than three months, and thirty calendar days if the employee’s period of continuous employment is three months or more. In comparison, the previous regulations included similar notice durations but applied only to employees with at least one month of continuous service.
The new regulations explicitly state that employers have the statutory right to place employees on garden leave for part or all of their notice period. However, employers are prohibited from unilaterally making a payment in lieu of the notice period without the employee’s written consent.
The new regulations also entitle all employees to request a written reference and reasons for their dismissal, whereas under the old regulations, only employees who had been continuously employed for at least one year on the date of termination were entitled to a written statement of the reasons for their dismissal. Employers who fail to comply with this requirement may be subject to fines.
Additionally, the new regulations re-quire an employer to pay all wages and any other amounts owed to an employee, excluding variable payments such as bonuses and commissions, within twenty-one calendar days of the employee’s termination date. Employers will be liable for a financial penalty of up to six months’ wages if they fail to pay an employee’s remuneration on time after termination.
5. Conclusion & Outlook
The ADGM Employment Regulations 2024 introduce key updates to employment standards, resolving ambiguities and providing clearer guidance for both employers and employees. By redefining the term “Employee” to include full-time remote workers and formally recognizing remote and hybrid work models, the regulations create opportunities for more flexible and modern work arrangements while improving transparency across all employment categories.
The regulations also improve probationary entitlements and termination processes, ensuring fair and consistent practices, while aligning the provisions for end-of-service gratuity with the federal UAE Labour Law.
With the 1 April 2025 implementation approaching, businesses in ADGM should not only comply with the up-dated regulations but also use them as an opportunity to promote a more flexible and progressive work environment.
Dr. Constantin Frank-Fahle, LL.M.
Founding Partner
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