ADGM Labour Laws: Working hours

In the fast-paced global business landscape, the concept of working time and regulations governing working hours play a pivotal role in shaping work-life balance, employee well-being, and overall economic productivity. The Abu Dhabi Global Market (ADGM), a prominent international financial center, has established a comprehensive framework for working time and regulations for working hours to ensure a harmonious and efficient work environment for both employers and employees. The ADGM Employment Regulations 2019 (the “Regulations”) is the regulation that comprehensively particularizes this framework.  

Forward-thinking Regulatory Frameworks of ADGM 

ADGM, situated in the heart of the United Arab Emirates (UAE), is a financial free zone that has rapidly gained prominence as a global business hub. Recognized for its forward-thinking regulatory approach and robust legal framework, ADGM has attracted numerous multinational companies, financial institutions, and startups. The meticulous attention given to aspects such as working time and working hours underscores ADGM’s commitment to fostering a productive and employee-friendly work environment. 

Working Time Regulations in ADGM 

Working time regulations in ADGM are designed to provide a clear structure for the number of hours employees are expected to work, rest periods, and breaks. These regulations are implemented to safeguard the well-being of employees while maintaining the operational efficiency of businesses. 

Standard Working Hours 

  • In ADGM, the standard working week typically consists of five to six days, mirroring the traditional working days of the UAE.  
  • This practice aligns with the broader UAE labor law and contributes to maintaining synergy within the local business ecosystem. 

Maximum Working Hours 

  • ADGM adheres to a maximum limit on working hours to prevent employee burnout and uphold their physical and mental health.  
  • The standard working hours are usually set at 48 hours per week, with an average of 8 hours per day.  
  • This cap is in line with global labor standards and Federal Labor practice in the UAE, aiming to strike a balance between productivity and employee well-being. 
  • According to the ADGM Regulations, Hourly Rate is the daily wage divided by the number of normal working hours in a business day for that employee under the employment contract in force on the day when the time off is taken. 

Overtime Regulations in ADGM 

  • In cases where work demands exceed the standard working hours, employers are obligated to provide overtime compensation to employees.  
  • The rate of overtime pay and regulations surrounding it are stipulated in accordance with the ADGM Regulations. Overtime serves as an incentive for employees to undertake additional work while safeguarding their interests. 
  • According to the ADGM Regulations, employees are entitled to overtime compensation in respect of time worked more than the Threshold over a Reference Period.  
  • A Reference Period means a period of up to 4 months for assessing overtime.  
  • The Threshold means 832 hours over a Reference Period of 4 months, pro-rated for short Reference Periods.  
  • A vacation leave and a National Holiday that fall on a normal working day for an employee during the Reference Period shall not be counted towards the Threshold. 
  • The calculations in relation to overtime compensation for a partially completed Reference Period shall be done on a pro-rata basis. 
  • Employers of the company are obligated to keep a record of the time of the employee who is likely to work hours close to or more than the Threshold. 
  • The overtime compensation is either monetary or by time in lieu, or a combination of both, as decided by the employer. Monetary overtime compensation is in addition to the daily wage and shall be payable at the rate of 25% of the hourly rate (or time in lieu as appropriate). For overtime worked between 9:00 p.m. and 4:00 a.m., the overtime compensation rate is 50% of the hourly rate (or time in lieu as appropriate). Monetary overtime payments shall be paid no later than 1 month after the expiration of the Reference Period in which they accrued. 
  • Any failure to make such payments or compensation shall be liable to a fine not exceeding level 3 on the standard fines scale. 

ADGM Labour Laws About Rest Periods and Breaks 

  • To ensure employees have time to rest and recharge, ADGM mandates the provision of rest periods and breaks during the working day.  
  • These breaks contribute to maintaining focus and productivity. It is common for employers to provide mid-day breaks to employees to account for the warm climate in the region, during which employees can rest and have meals. 
  • Further, the employers shall not mandate or allow directly or indirectly an employee to work excessive hours or hours detrimental to the Employee’s health or safety. 

Annual Leave Policies, Rules and Regulations in ADGM 

  • ADGM also places significant emphasis on annual leave, recognizing the importance of work-life balance.  
  • Employees are entitled to a specific number of paid annual leave days, which may vary based on their tenure within the organization.  
  • These annual leaves allow employees to take a break from work, rejuvenate, and spend quality time with their families. A separate article on Leave requirements in ADGM is illuminated in the coming article.  

Employee Welfare and Well-being 

  • The meticulous working time regulations and emphasis on work-life balance within ADGM underscore its commitment to employee welfare and well-being.  
  • Recognizing the potential challenges posed by the demanding nature of some industries, ADGM’s regulations ensure that employees are not overburdened by excessive working hours.  
  • This approach results in improved employee morale, increased job satisfaction, and enhanced productivity. 

Impact on Businesses 

  • While working time regulations and regulations for working hours may appear to impose limitations on businesses, they contribute to the long-term success of companies operating within ADGM 
  • By prioritizing employee well-being, businesses can reduce turnover rates, enhance employee loyalty, and maintain a positive corporate reputation.  
  • Furthermore, a healthy work-life balance contributes to increased creativity, innovation, and overall organizational efficiency. 

Adaptability and Flexibility of ADGM Regulatory Framework 

  • ADGM’s regulatory framework is designed to be adaptable and flexible to accommodate the diverse needs of various industries.  
  • Different sectors may have distinct operational demands, and the regulations are structured in a way that enables companies to optimize their work schedules while complying with ADGM labour laws. 

ADGM framework for balanced work environment 

  • In the dynamic landscape of modern business, working time and regulations for working hours are crucial elements that impact employee welfare, operational efficiency, and the overall success of organizations.  
  • ADGM’s commitment to providing a comprehensive framework for working time reflects its dedication to fostering a balanced and harmonious work environment.  
  • By adhering to global labor standards and promoting employee well-being, ADGM solidifies its position as a prominent global business hub that prioritizes the interests of both employers and employees. 

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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