The Abu Dhabi Global Market has published its call for consultation regarding proposed amendments to its employment regulations. The consultation period ends on August 26, 2024. This LawFlash summarizes the key proposed changes to the regulations.

EMPLOYEES

The proposed amendments to the regulations (1) introduce an amendment to the definition of “employee,” (2) create a new category of remote workers, and (3) clarify the entitlements of part-time employees.

Definition of “Employee”

Under the current Abu Dhabi Global Market (ADGM) regulations, an employee is defined as an individual who works under a contract of employment, holds an ADGM work permit, and is based or ordinarily works from the ADGM. The proposed amendments simplify the definition in that only one of two criteria will have to be satisfied for an individual to qualify as an employee: the individual has either agreed to be subject to the regulations in an employment contract with an ADGM employer, or the individual is based within, or ordinarily works from, the ADGM for an employer.

Remote Employee

The proposed amendments to the regulations introduce a number of different categories of remote employees, described as the Fully Remote Employee, the Overseas Fully Remote Employee, and the UAE Fully Remote Employee. A number of provisions in the regulations will not apply to UAE and Overseas Fully Remote Employees, such as certain provisions regarding health and safety in the workplace.

In addition, Overseas Fully Remote Employees will not need to be provided with a residence visa and an identity card but, importantly, will still need a work permit. UAE Fully Remote Employees will need to receive a UAE residence visa, identity card, and work permit. Fully Remote Employees, however, will be able to commence work for the employer before the work permit is issued.

Part-Time Employee

The proposed amendments to the regulations clarify the calculation of entitlements for part-time employees by distinguishing between employees who work fewer hours in a day than their full-time counterparts, and those who work fewer days per week than full-time employees. Where an employee works fewer hours per day but the same number of days per week as a full-time employee, entitlements under the regulations will not be prorated. Under the current regulations, the treatment of part-time employees on different work patterns is unclear.

PROBATION PERIOD

The current regulations do not address whether an employee is entitled to certain entitlements (such as sick leave, annual leave, or a repatriation ticket) during the probation period. The proposed changes to the regulations clarify that employees under probation are not entitled to maternity leave but are entitled to a repatriation flight (unless the employee joins another employer in the UAE or is terminated for cause), one day of paid sick leave per month, and annual leave (subject to the employer’s approval).

The amended regulations further stipulate a minimum notice period of one week for both the employer and the employee during the probation period. The maximum probation period remains six months.

OVERTIME

The proposed changes to the regulations remove any reference to overtime. Therefore, there will be no statutory entitlement to overtime following the enactment of the proposed amendments. The regulations do, however, include a reference to a maximum of 48 working hours in any seven-day period. However, the employee can opt out of the maximum working hours.

LEAVE AND BREAKS

The proposed amendments to the regulations will affect certain leave entitlements, including:

• Introduction of paternity leave of five business days for fathers, to be taken within two months of the child being born or adopted
• Introduction of a qualifying service entitlement for maternity leave of 12 months’ service
• Introduction of bereavement leave of five business days in the event of the death of a spouse, parent, child (including adopted child), or sibling
• Introduction of nursing breaks for female employees—at least one break per day of not less than one hour in aggregate, for nine months from the date of delivery
• Increase of the cap regarding carry over of annual leave from five business days to 10 business days

DISCRIMINATION AND VICTIMIZATION

The proposed amendments to the regulations introduce pregnancy and maternity as protected characteristics. In addition, the amended regulations will include the concept of victimization, (omitted from the current regulations) that will prohibit an employer from subjecting an employee to a detriment because the employee has done one of the protected acts as defined in the amended regulations.

VICARIOUS LIABILITY

The proposed amendments also introduce vicarious liability under which an employer will be liable for any act, attempted act, or omission of an employee done in the course of their employment where such act, attempted act, or omission leading to a claim is sufficiently connected to the employee’s employment.

END-OF-SERVICE GRATUITY

Under the current regulations, an employee is not entitled to receive end-of-service gratuity where the employee is terminated for gross misconduct. The proposed amendments to the regulations will change this position so that an employee’s entitlement to end-of-service gratuity is protected and payable, regardless of the circumstances of termination. This is consistent with the position in the rest of the UAE. Under the proposed amendments to the regulations, an employer can also offer a pension scheme in lieu of end-of-service gratuity.

OUTLOOK

Employers are invited to provide comments on the proposed regulations by August 26, 2024. Once the amended regulations are enacted, employers will need to amend their existing employment contract templates and employment policies in order to reflect the amended regulations.

The ADGM Consultation Papers are available at the ADGM website.

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