Hiring in the ADGM: Quick reference for recruiters, employers, and job seekers

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Hiring in the ADGM (Abu Dhabi Global Market) permits the following types of employees: interns, non-employees, outsourced individuals, secondees, and temporary freelancers. Here is a quick overview of the aspects to keep in mind while recruiting in ADGM:

  • The Employer shall conduct a background investigation on the prospective Employee or may hire a recruitment agency to do so.
  • The Employer and Employee shall not enter into any settlement agreement to waive any of the provisions as specified in the Regulations. Exception: Such an agreement shall be valid if it is in writing, signed by both the parties and the party who is waiving such rights in favor of the other has given due diligence to make an informed decision.
  • The Employer shall not induce, influence or persuade the Employee to take up the employment by misrepresenting a position, the type of work, wages or the conditions of the employment. It could invite a heavy penalty.
  • Children under 15 years shall not be employed; youth between the age of 15 and 18 years can be employed with permission from the Registrar.
  • A written contract of employment is essential. The Employer shall give a written contract of employment, in the English language to the Employee within one month of the commencement of employment.
  • The Employer shall be responsible for obtaining the work permit, UAE residency visa and UAE Identity Card of an employee.
  • The probationary period of employment shall not exceed six (6) months.  
  • The Employer shall maintain all the essential documents and information pertaining to the Employee for a minimum of 2 years after the termination of employment.

Read on to find the explanation of the above aspects:

Key regulations that guide recruitment in ADGM

ADGM is an International Financial Free Zone. The Board of Directors of the ADGM, in the exercise of its powers under Article 6 (1) of the ADGM Founding Law, enacted the ADGM Employment Regulations 2019 (the “Regulations”), which applies to the ADGM and its authorities, as well as ADGM Licensed Persons and their employees. In furtherance to the ADGM Regulations, the Registrar of ADGM while implementing Section 61 of the Regulations, enacted the Employment Regulations 2019 (Engaging Non-Employees) Rules, which was further amended to state the Employment Regulations (Engaging Non-Employees) Rules 2023 (the “Non-Employees Rules”) and the ADGM Employment Regulations 2015 (Compensation Awards and Limits) Rules 2016, which was further amended to state the ADGM Employment Regulations (Compensation Awards and Limits) Rules 2019 (the “Compensation Rules”).

An Employer shall mean a licensed person, that is, or was, a person who has or had a valid ADGM license to carry on one or more controlled activities in ADGM; or the Abu Dhabi Global Market as governed by the ADGM Founding Law.

An Employee shall mean a person who works or will work in the service of an Employer who has the right to control the details of their work performance and is a person who is based within, or who is ordinarily working within or from ADGM.

Types of Employment in ADGM

As explained in https://atblegal.com/adgm-employment-regulations-a-quick-overview/ according to the Non-Employees Rules, the kind of employees permitted to be employed in ADGM are as follows:

  • “Intern” means a student or trainee who works for an ADGM Entity, with or without pay, in order to gain work experience;
  • “Non-Employee” means a person who is a Secondee, an Outsourced Individual, an Intern, or a Temporary Freelancer;
  • “Outsourced Individual” means an individual temporarily working in Abu Dhabi Global Market for one or more ADGM Entities under an outsourcing agreement and who has the right to work in the UAE but does not hold a visa facilitated by the Registrar;
  • “Secondee” means an individual temporarily working in Abu Dhabi Global Market for an ADGM Entity on a secondment basis and who has the right to work in the UAE but does not hold a visa facilitated by the Registrar;
  • “Temporary Freelancer” means an individual who provides services in or from the Abu Dhabi Global Market to an ADGM Entity on a temporary basis, who is not under the exclusive direction and control of an ADGM Entity, and who holds a freelancer license from a UAE free zone.

Hiring in the ADGM: Rights, Responsibilities and Obligations

There is no specific pattern as such that is followed in ADGM for recruiting employees. ADGM businesses and companies follow the standard recruitment patterns that other mainland (or Free Zone) companies usually follow. There are no legal requirements to give preference in hiring to, or not to discriminate against, particular people or groups of people. The following categories should be considered while employing a person in ADGM:

  • Part 1 (i.e., from Sections 1 to 11) of the Regulation deals with the factors to be considered by the employer while hiring employees in ADGM. The conditions as stipulated in the Regulation must be strictly followed while recruiting an employee in ADGM.
  • Section 1 of the Regulations specifies that the Employer and Employee shall not enter into any settlement agreement under which the Employer or Employee shall agree to waive any of the provisions as specified in the Regulations. This includes the rights of the employer and/or employee as they are entitled to according to the Regulations, potential claims that the Employer (or the business or company) may have against the Employee’s employment, including claims to enforce rights under the Regulations. However, Section 1(2) of the Regulations gives an exception to this by stating that such an agreement shall be valid provided that if such agreement is in writing, where such agreement is signed by both the Employer and the Employee, and a valid consideration is given to the relevant party who is waiving such a right (or claims) by the other party.
  • The ADGM business or companies and/or the employer are entitled to conduct a background investigation or hire a recruitment agency to do so, provided the obligations and duties prescribed as in the Regulations and the Laws should not be restricted or prohibited in any manner.
  • The Employer shall not induce, influence or persuade the Employee in any manner to take up the employment or to work or to be available for any work, by misrepresenting the availability of a position; the type of work; the wages or the conditions of the employment. The Employer shall, in accordance with the Compensation Rules, be liable for a fine not exceeding level 7 on the standard fines scale in each case, if the employer misrepresents, induces, influences or persuades the employee in any way.
  • Further, the Employer shall not employ a child who is below the age of 15 years. The Employer may employ youth between the age of 15 years to 18 years provided that there is permission from the Registrar. While employing such youth, between the age group of 15 years to 18 years, the Employer shall take all appropriate measures to ensure the safety of the youth and to make sure that the conditions of the employment are reasonable and appropriate for their age and well-being. The Employer shall, according to the Compensation Rules, be liable for a fine not exceeding level 8 on the standard fines scale if the employer fails to comply with Section 3 of the Regulations.
  • The Employer shall be responsible for obtaining the work permit of an employee, including maintaining and paying the cost of the work permit. The employer shall also be responsible for obtaining and paying for the UAE residency visa and UAE Identity Card (also known as the Emirates Identity Card). The Employer failing to obtain the same shall be liable in accordance with the Compensation Rules.
  • The Employee may only be employed by the Employer pursuant to a written contract of employment which shall be written and signed by both the Employer and the Employee. The Employer shall give a written contract of employment, in the English language to the Employee within 1 month of the commencement of the employment, which shall contain the details of both the parties, the nature of the work, details of the employment, the applicable laws, entitlements of the Employee, termination, benefits and other essential conditions in detail.
  • The Employer shall provide a probationary period to the Employee which shall not exceed six (6) months.
  • The Employer shall maintain the records of all the essential documents and information pertaining to the Employee in their safe custody during the period of employment and for a minimum period of 2 years after the termination of the employment.

The Federal Employment Law No. 33 of 2021 is the law that deals with the labor relations in the UAE mainland. Therefore, all the other free zone employment regulations are usually inspired by this Federal Employment Law. Hence, an Employer shall consider all the above criteria while recruiting a person in ADGM which is in compliance with the ADGM Employment Regulations 2019 as well as the Federal Employment Law No. 33 of 2021.

REFERENCES

a.ADGM Employment Regulations 2019
b.ADGM Work Permit Guidance
c.ADGM Registration Authority Guidance

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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