Abu Dhabi Global Market - The New Employment Horizon

- Written by Ivor McGettigan, Partner at Al Tamimi & Co.

Abu Dhabi Global Market (“ADGM”), the UAE’s latest financial free zone, came to life in 2015 and its employment regulations (“Regulations”) came into effect as of 14 June 2015.

From an employment perspective the Regulations closely follow those of the DIFC in Dubai and as such differ in a number of significant areas from the UAE position (which we refer to as ‘onshore’ in this article).

The Key Points

Part-Time Working Arrangements. The Regulations provide for part-time working arrangements. In particular, the Regulations state that employee leave entitlements, as well as an employer’s right to terminate for excessive sick leave, shall apply but shall be calculated on a pro-rata basis for part-time employees.

Overtime. The Regulations stipulate that the maximum working week is 48 hours “unless the employer has first obtained the employee’s freely-given and informed consent in writing”. There is no provision for overtime payment for hours worked in excess of 48 hours.

Annual leave. Employees are entitled to 20 working days annual leave and are allowed to carry forward up to five (5) working days into the next calendar year.

Maternity Leave. Employees are entitled to a minimum maternity leave of 65 working days of which the first 33 days are fully paid and the balance is paid at 50% normal rate.

Sick Leave. An employee is entitled to 60 working days paid sick leave in any 12 month period.

Discrimination. The Regulations prohibit an employer from discriminating against an employee on the grounds of sex, marital status, race, nationality, religion, age and disability.

Probation period. An employer may place an employee on a probation period of up to six months.

Paternity Leave. Paternity leave of 5 working days is provided to employees in ADGM.

Termination

The Regulations do not contain express provision for compensation for unfair dismissal nor is there a requirement for an employer to follow established procedures for implementing dismissals.

The minimum notice periods in ADGM: For employees with 3 months to 5 years service, the minimum notice is 30 days and for those with over 5 years service, it is 90 days.

Post Termination Restrictions 

The effectiveness of post termination restrictions in the UAE has been debated for some time. Non-compete and non-solicitation clauses will potentially have more bite within ADGM in that the equitable remedy of injunctive relief should be available in the ADGM courts.