The New ADGM Employment Regulations – What You Need to Know

The New ADGM Employment Regulations 2025

The Abu Dhabi Global Market (ADGM) Authority has unveiled the Employment Regulations 2025, set to take effect on 1 April 2025. These new regulations introduce significant amendments that employers must understand and implement to ensure compliance and avoid potential fines and liabilities. The regulations allow for more flexible working arrangements.

Key Updates in the ADGM Employment Regulations 2025

Scope of Application

Exclusions: Employers holding dual licenses with the Abu Dhabi Department of Economic Development (ADDED) will not be governed by these regulations but by the UAE federal labor law.
Remote Employees: A new category recognizes Remote Employee, offering specific rights and obligations for individuals working outside the UAE, such as exemptions from UAE residence visa or ADGM work permit requirements.

Remote Employees

Introduction of the “Remote Employee” Category:
- Remote Employees working outside the UAE are subject to distinct rights and obligations.
- The employer is required to provide the staff with and maintain the technical equipment required to carry out work remotely.
- These employees do not require a UAE residence visa or an ADGM work permit.

Immigration Compliance

Employers must cancel an employee’s residence visa and/or work permit promptly after termination of employment.
Employers are prohibited from making residence visa and/or permit cancellation conditional on an employee waiving any of their rights.

Employment Contracts

Employers must provide a written employment contract meeting all regulatory requirements within one month of the employee’s start date.
The contract must specify that the employee is a remote one, if applicable
Any changes to the contract must be agreed upon in writing by both the parties.

Probationary Period

The maximum probationary period is capped at six months, or half the term of the contract for fixed-term agreements under six months.
During probation:
- Employees may take annual leave only with employer approval.
- Sick leave is allowed, but without sick pay.
- Employees terminated during probation are entitled to a repatriation flight regardless of the termination reason.

Part-Time Employment

Introduction of the “Part-Time Employee” classification, enabling employers to calculate leave and other entitlements proportional to the employee’s reduced working hours.

Working Hours

Regular working hours are capped at 48 hours per week unless otherwise agreed in writing.
Muslim employees are entitled to a 25% reduction in working hours during Ramadan without reduction in pay.

Parental and Other Leaves

Enhanced provisions include:
- Maternity leave extended to employees adopting children under five or experiencing stillbirth/miscarriage after the 24th week of pregnancy.
- Employees are entitled to five days of paid bereavement leave.
- Employees can roll over up to five days of annual leave into the next year.
- Mothers returning from maternity leave are entitled to a nursing break of at least one hour daily for nine months.
- Paid leave for ante-natal appointments for both male and female employees.

End of Service Gratuity

Removal of the two-year pay cap on gratuity calculations.
Employers may offer employees participation in a pension or savings scheme as an alternative to gratuity.
Gratuity must be paid regardless of the termination reason.

Death in Service Compensation

Employees’ estates may receive compensation of up to 24 months’ wages in cases of death during employment.

Discrimination and Harassment Protections

Employers must not discriminate against an employee over sex, marital status, pregnancy and maternity, race, nationality, religion, age and/or disability. They are also not allowed to victimise an employee over complaints and proceedings related to discrimination
Specific remedies for harassment or discrimination may include compensation of up to three years’ wages.

Termination of Employment

All employees on unlimited contracts are entitled to a minimum notice period for termination.
Employers may place employees on garden leave for part or all of the notice period.
Payment in lieu of notice can no longer be made unilaterally by employers.
Employees may request written reasons for dismissal and a written reference, with non-compliance leading to penalties.

Settlement Agreements

Employees may waive rights only by entering into legally compliant binding settlement agreements.

Repatriation Flights

Eligible employees are entitled to a repatriation flight within 30 days of termination unless they were terminated for cause.

Vicarious Liability for Employers

Employers may be held accountable for employees’ unlawful acts unless they can demonstrate that appropriate policies and procedures, such as anti-harassment and equal opportunities policies, are in place.

Implications of the New Regulations

For Employees:
- Increased Accountability: Employees are now directly accountable for their actions and adherence to workplace ethics.
- Awareness of Legal Obligations: Employees must familiarize themselves with the legal boundaries of their roles to avoid violations.
- Consequences of Non-Compliance: Failure to comply with these obligations may lead to disciplinary actions.
For Employers:
- Stronger Compliance Framework: Employers need to update internal processes and policies to align with the new regulations.
- Training and Awareness: Employers must ensure all employees are aware of their statutory obligations through regular training sessions.
- Enhanced Monitoring Systems: Employers should consider implementing monitoring systems to detect and prevent misconduct.