At a glance
- The Abu Dhabi Global Market (ADGM) has enacted two new regulations with the aim of enhancing the protection of whistleblowers.
- The new regulations afford protection from retaliation and civil or contractual liability to employees who make protected disclosures.
- The new regulations came into force on 5 July 2024.
- ADGM entities have until 31 May 2025 to implement certain arrangements required by the regulations.
The ADGM has introduced two new regulations: the Employment Regulations (Amendment No. 1) 2024 (Employment Regulations) and the Whistleblower Protection Regulations 2024 (Whistleblower Regulations) (together the Regulations). Effective from 5 July 2024, the Regulations seek to offer protection to whistleblowers by safeguarding employees who report violations of the law or financial crimes in certain, defined circumstances.
Protected disclosures
The Regulations introduce the concept of 'protected disclosures', which is already widely recognised in other jurisdictions worldwide, to the ADGM. The Whistleblower Regulations establish that protected disclosures relate to knowledge or a reasonable suspicion that an ADGM entity, employee or agent has contravened a law applicable in the ADGM or has, may have, or is likely to engage in money laundering, fraud or any other financial crime. Disclosures can be made by employees to anyone designated to receive such disclosures in the relevant ADGM entity and various regulatory or law enforcement agencies.
Under the Employment Regulations, if such disclosures are made by an employee in good faith, the employee making the disclosure must not be subject to any civil or contractual liability by their employer as a consequence. Additionally, employers must not retaliate, or threaten to retaliate, against an employee due to the fact that the employee intends to make or has made a protected disclosure.
Retaliation includes, but is not limited to, dismissal, forced retirement or resignation, failure to offer equal terms of employment, and any other act which is reasonably likely to cause detriment or disadvantage to the employee. If an employee is subject to retaliation, they may apply to the court for a declaration which could lead to the employer being required to pay compensation (which may include an amount in relation to injury to feelings amongst other things) to the employee.
Implementation and compliance
From 31 May 2025, employers in the ADGM must implement and maintain effective arrangements to facilitate the making of protected disclosure, assess and escalate concerns arising from those disclosures and protect the identity of those making disclosures. However, steps taken by employers are required to be proportionate to the size and complexity of the employer's business. Clearly, employers with a larger headcount and more significant tools at their disposal will be held to a higher standard in terms of implementation of the rules.
Further, the arrangements referred to above must be set out in written policies and procedures by various entities including those with more than 35 employees or more than USD13.5 million in annual turnover.
The ADGM will monitor compliance with the Regulations. Specifically, the Whistleblower Regulations provide the Registrar with powers to issue sanctions to any entities deemed to be in breach of the Regulations. Such sanctions include financial penalties, public or private condemnation, or suspension / withdrawal of the offending entity's ADGM commercial license.
Obligations for employers
Employers located within the ADGM should conduct a review of their policies and procedures, in order to ensure that they are in alignment with the new Regulations. This will involve setting up systems to enable employees to make protected disclosures, ensuring that protected disclosures are assessed and escalated where necessary and protecting the identities of employees making such disclosures. Employers must also maintain written records in connection with protected disclosures for at least six years.
If you have any questions on the new ADGM whistleblowing regulations, please get in touch with your DLA Piper contact.
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