The new ADGM Employment Regulations 2019 – What changed? – Part 1 (of 2)

04 Dec 2019

The new ADGM Employment Regulations 2019 (the New Regulations) will come into force on 1 January 2020. The New Regulations follow a public consultation that was implemented earlier this year and revoke the old ADGM Employment Regulations 2015, as amended (the Old Regulations). This article highlights the five fundamental changes that ADGM employers need to know.

1. Overtime

The New Regulations introduce a statutory overtime for eligible employees. The Old Regulations provide that working time shall not exceed 48 hours for each seven day period unless the employee has given prior written consent. According with the New Regulations:

• Working time shall not exceed 48 hours for each seven day period and (contrary to the Old Regulations), an employee cannot opt out by giving written consent and instead the below overtime provisions are applicable.
• Unless the employee is in a managerial or supervisory position or (positions normally expected within that industry internationally not to be entitled to overtime), employees are entitled to overtime for time worked in excess of 832 hours over a four month period (the Threshold). This seems to establish that no overtime is owed for hours worked over the 48 hour week but falling below the Threshold.
• The overtime calculation can be monetary, 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 paid as below:

• Overtime payments must be paid within one month of the four month period which they relate to.
• The overtime calculation for a period of less than four months shall be done on a pro rata basis.
• The employer must keep time records for the employees expected to work hours close to or in excess of the Threshold.
• The recent overtime provisions are more in line with the position under Federal Law No. 8 of 1980, as amended (the Federal Labour Law).

2. Sick pay

While the Old Regulations established 60 business days sick leave at full pay, the New Regulations, despite still providing for 60 business days of sick leave, its respective pay is now broken down into:

a)       10 business days on full pay;

b)       20 business days on half pay; and

c)       30 business days on no pay.

The above breakdown is more in line with the position in the Federal Labour Law and also reflects the position under DIFC Law No. 2 of 2019 (the DIFC Employment Law), which came into force on 28 August 2019.

Moreover, the New Regulations provide that the employer may terminate an employee who has exceeded 60 business days sick leave in any 12 month period, save where the employee has taken sick leave due to a Disability.

Since the Ministry of Human Resources and Emiratisation agrees with one and three month notice periods, and the DIFC Employment Law has a three month notice period for employees with five or more years of service, this is an remarkable change.

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