New Employment Regulations Issued by ADGM

By Dennis Varghese

On 28 October 2019, the Abu Dhabi Global Market (“ADGM”) published its new employment regulations (“New Regulations”) which will come into effect on 1 January 2020. In this article, we examine the key changes and contrast them to the current employment provisions in operation in the ADGM (“2015 Regulations”).

The changes are aimed to strengthen ADGM’s employment framework in the interests of both employers and employees, in order to meet international best practices. The Dubai International Financial Centre (“DIFC”) took a similar step in August of 2019 when it also adopted an updated employment law. For more information on the new DIFC employment law, please click here.

ADGM’s New Regulations can be read in full here.

Summary of Key Changes

Overtime Payment

2015 Regulations: The Regulations stipulate that the maximum working week is 48 hours “unless the Employer has first obtained the Employee’s consent in writing”. There is no provision for overtime pay for hours worked in excess of 48 hours.

New Regulations:

• Employees are now entitled to overtime compensation in respect of time worked in excess of 832 hours over a period of up to 4 months. Calculations are done on a pro-rata basis;
• Overtime compensation can either be monetary or by time in lieu, as decided by the employer. Monetary overtime is the employee’s daily wage plus 25% of the hourly rate (or 50% of the hourly rate for overtime between 9.00 pm – 4.00 am);
• Employees in positions where it is reasonably expected within that industry internationally that overtime time compensation is not paid (such as managers and supervisors), are exempted from overtime compensation.

Sick Leave/Pay and Repatriation Flight Tickets

2015 Regulations:

1. An employee is entitled to 60 business days paid sick leave in any 12-month period;
2. No provision with regard to repatriation flights.

New Regulations:

1. The number of sick leave days remain at 60 business days. However, amendments have been implemented to reduce the sick pay to the following (the change matches the minimum requirement under DIFC employment law):

• full pay for the first 10 business days;
• half-pay for the next 20 business days; and
• no pay for the remaining 30 business days.

2. The New Regulations now require employers to provide, upon the termination of the employee, with a one-way repatriation flight ticket to the employee’s home country unless:

• the employee obtains an alternative employment or visa sponsorship in the UAE within 30 days; and
• the employee has been dismissed with cause.

Discrimination

2015 Regulations: Prohibited discrimination against an employee on the grounds of sex, marital status, race, nationality, religion and disability.

New Regulations: The New Law has widened the scope of the previous anti-discrimination provisions by including discrimination on the basis of ‘colour’.

Termination

2015 Regulations: Required the Employer to submit a notice to the employee prior to termination of employment in the following manner:

• 7 days’ notice if the period of continuous employment is less than 3 months;
• 30 days’ notice if the period of continuous employment is 3 months to 5 years’;
• 90 days’ notice if the period of continuous employment is over 5 years’.

New Regulations: A written notice is now required to be submitted by the employer. Additionally, employers are no longer required to submit a 90 days’ notice in cases of over five years of employment; as such employer or employee need only give 30 days’ written notice. Hence, notice is now required in the following manner:

• 7 days’ notice if the period of continuous employment is less than 3 months; and
• 30 days’ notice if the period of continuous employment is more than 3 months.

Powers of ADGM Board

2015 Regulations: Stated that the ADGM Board may make rules setting out applicable fines.

New Regulations: Now expressly refers to powers of the ADGM Board to issue rules setting out fines. These rules have been issued alongside the New Regulations and will also come into force on 1 January 2020. A full copy of the rules can be viewed here.

Data Protection

2015 Regulations: Included comprehensive data protection provisions.

New Regulations: Data protection provisions set out in the 2015 Regulations have now been removed as ADGM does not have a stand-alone data protection law.

Youth Employment

2015 Regulations: Prohibits employers employing a youth below 15 years of age.

New Regulations:

• New Regulations provide clarity on the employment of youth: employers can now hire youths between 15 and 18 years of age;
• New Regulations also widen the scope of protection offered to youth employees, obligating employers to take all appropriate measures to ensure the conditions of employment are safe and reasonable.

Conclusion

Changes introduced by the New Regulations are not substantial in terms of the number of amendments but it is important that companies in the ADGM review their existing policies, procedures and employment contracts and make any necessary amendments to ensure the provisions in the New Regulations are complied with before 1 January 2020.

If you need any help in understanding the changes and the potential impact of the recent amendments, please contact us on info@adglegal.com.