Reed Smith Client Alerts

A new set of Abu Dhabi Global Market (“ADGM”) employment regulations came into force on 13 May 2020. They set out the rules and requirements for ADGM employers seeking to engage secondees, interns, temporary freelancers and outsourced workers.

This enactment closely follows the introduction and recognition of secondments, short-term working and part-time working into DIFC employment law in August 2019.

Authors: Adela Mues Heidi Paget-Brown

The ADGM Regulations

  • The ADGM Employment Regulations 2019 (Engaging Non-Employees) Rules 2019 (the New ADGM Rules) apply only to ADGM entities. The New ADGM Rules supplement the ADGM Employment Regulations 2019 (the “ADGM Employment Regulations”).
  • Under the New ADGM Rules, ADGM entities may recruit certain categories of ‘Non-Employee’ but must first obtain a temporary work permit from the ADGM.
  • Such permits may be issued for three, six or 12 months and fees range from AED 150 – AED 600.
  • A ‘Non-Employee’ is defined as any of the following categories of individual, working in the ADGM:

(a) Intern – a student or trainee who works for an ADGM entity, with or without pay, in order to gain work experience.

(b) Outsourced individual – an individual temporarily working 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 ADGM Registrar.

(c) Secondee – an individual temporarily working 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 ADGM Registrar.

(d) Temporary freelancer – an individual who provides services in or from the ADGM to an ADGM entity on a temporary basis but is not under the exclusive direction and control of the ADGM entity, and who holds a freelancer licence from a UAE free zone.

  • Although the New ADGM Rules were created under the auspices of Article 61 of the ADGM Employment Regulations, the New ADGM Rules do not explicitly address what rights and protections are to be granted to Non-Employees. We assume that Non-Employees are not afforded the same rights and protections as those available to ‘Employees’ (as defined under the ADGM Employment Regulations) – such as the right to end-of-service gratuities or compensation for dismissal – and it is likely that the ADGM will issue further guidance on this.
  • The New ADGM Rules exposes the employer to a maximum fine of AED 500 for a late application.
  • A failure to comply also exposes ADGM employers to the risk of inadvertently granting Employee status to any such individual, giving rise to all benefits and protections available to standard Employees under the ADGM Employment Regulations.