Employer’s Obligations in ADGM: Ensuring Fairness and Compliance

Introduction

The Abu Dhabi Global Market (ADGM), a renowned international financial center, has been gaining prominence as a business hub in the heart of the United Arab Emirates (UAE). With its business-friendly regulations and conducive environment for both local and foreign enterprises, ADGM has attracted a diverse range of businesses, leading to an increasing need for clarity and understanding of the legal obligations that employers must adhere to. This article delves into the key obligations that employers in ADGM must fulfill, highlighting the significance of these obligations in maintaining a fair and compliant workplace. 

Part 5 of the ADGM Employment Regulations 2019 (the Regulations) deals with the obligations of the employer in ADGM. It stipulates several obligations that the employer ought to perform while employing an employee in the employment.  

Employment Contracts and Terms

At the heart of the employer-employee relationship lies the employment contract. In ADGM, employers are obligated to provide written employment contracts to their employees within 30 days of the employee’s start date. These contracts must outline essential terms and conditions, including job responsibilities, compensation, working hours, and leave entitlements. By ensuring that employment terms are documented and communicated effectively, employers set the foundation for a transparent and harmonious working relationship. A detailed article on employment contracts was dealt with in a previous article under the same series. The link to it can be accessed here: 

Wage Protection

In ADGM, as in most jurisdictions, ensuring timely and accurate payment of wages is a crucial obligation for employers. Employers must abide by laws governing minimum wage standards, payment frequencies, and methods of payment. This not only ensures the financial well-being of employees but also prevents potential disputes related to compensation. A detailed article on the protection of wages was dealt with in a previous article under the same series. The link to it can be accessed here: 

Non-Discrimination and Equal Treatment 

Promoting diversity and inclusivity in the workplace is a global priority, and ADGM is no exception. Employers are required to uphold principles of non-discrimination, ensuring that all employees are treated fairly, irrespective of their nationality, gender, religion, or other protected characteristics. Equal opportunities for career advancement, training, and benefits should be provided to all employees, fostering a conducive work environment that values diversity. 

Health and Safety

Employee well-being is paramount, and ADGM mandates that employers provide a safe and healthy working environment. Employers must adhere to health and safety regulations, implement necessary measures to prevent accidents and provide appropriate training to employees to mitigate risks. Regular inspections and audits are encouraged to identify and rectify potential hazards, guaranteeing the physical and mental well-being of the workforce. Further, an employer has the duty to: 

  1. ensure adequate systems are in place that minimize risks to health concerning fire hazards and the use, handling, storage, and transport of dangerous articles and substances. 
  2. provide information, instruction, training, and supervision to employees, in English or, if necessary, another language understood by the employees, to ensure their health and safety at work. 
  3. inform each employee in writing at the time of recruitment of the dangers, if any, connected with employment and of the protective measures the employee shall take. 
  4. provide and maintain adequate and safe access to, and from, the workplace; and 
  5. provide any other facilities or meet any other requirements as prescribed in any rules made by the ADGM board. 

Working Hours and Leave

Work-life balance is an integral aspect of employee satisfaction and productivity. ADGM enforces regulations concerning working hours, rest breaks, and annual leave entitlements. Employers must ensure that employees’ working hours adhere to legal limits and that they receive appropriate rest periods. Additionally, employees are entitled to annual leave, sick leave, and maternity/paternity leave as per the applicable laws. A detailed article on the Working Hours and Leave requirements are dealt with in a previous article under the same series. The link to it can be accessed here: 

Termination and Severance

Employment relationships may come to an end for various reasons, and ADGM outlines procedures that must be followed during termination. Employers are obligated to provide written notice of termination or pay in lieu of notice. In certain cases, employees are entitled to severance pay based on their length of service. Adhering to termination laws prevents unfair dismissals and maintains the reputation of the employer. 

Grievance Handling and Dispute Resolution

Employers should establish effective mechanisms for addressing employee grievances and disputes. ADGM encourages the establishment of internal grievance-handling procedures that provide employees with a platform to voice their concerns. In case of unresolved issues, employers and employees can resort to the ADGM Courts or alternative dispute resolution methods for a fair resolution. 

Employee Records and Data Protection 

Maintaining accurate and up-to-date employee records is a legal obligation. Employers must securely store employee information, including contracts, salary records, and personal data. With the growing concern over data privacy, ADGM employers must also adhere to data protection regulations to safeguard sensitive employee information. 

Workforce Nationalization

In alignment with the UAE’s efforts to promote workforce nationalization, ADGM has certain obligations related to the employment of UAE nationals. Employers are encouraged to contribute to the development and training of UAE nationals in their workforce, helping to enhance local talent and economic growth.  

Continuous Professional Development

Employers in ADGM are expected to invest in the continuous professional development of their employees. Providing opportunities for training and skill enhancement not only benefits employees but also contributes to the growth and competitiveness of the organization. 

 In conclusion, employers in ADGM are bound by a comprehensive set of obligations that ensure a fair, transparent, and compliant work environment. These obligations encompass various aspects of the employment relationship, from recruitment to termination, and reflect the global trend toward prioritizing employee rights and well-being. Adhering to these obligations not only prevents legal complications but also fosters a positive organizational culture that attracts and retains talented individuals, contributing to the overall success of businesses within ADGM. 

About ATB Legal

ATB Legal is a full-service legal consultancy in the UAE providing services in dispute resolution (DIFC Courts, ADGM Courts, mainland litigation management and Arbitrations), corporate and commercial matters, IP, business set up and UAE taxation. We also have a personal law department providing advice on marriage, divorce and wills & estate planning for expats. Please feel free to reach out to us at office@atblegal.com for a non-obligatory initial consultation.

by Aparna T Nambissan

Aparna is a legal consultant at ATB legal. She holds a Bachelor’s degree in Law and Commerce from Karnataka State Law University. She is enrolled with the Bar Council of Karnataka.

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