Employee rights and protections during employer insolvency in the United Arab Emirates (UAE) vary across jurisdictions.

In mainland UAE, Federal Decree-Law No. 51/2023 Promulgating the Financial Reorganisation and Bankruptcy Law mandates immediate payment of wages and restricts termination of employment contracts unless specifically ordered by the bankruptcy court.

Within the Dubai International Financial Centre (DIFC), DIFC Law No. 1/2019 DIFC Insolvency Law and the DIFC Insolvency Regulations classify certain employee entitlements as preferential debts, granting them priority over unsecured creditors but ranking them behind secured creditors.

In the Abu Dhabi Global Market (ADGM), the ADGM Insolvency Regulations 2022, read with the ADGM Employment Regulations 2025, establish preferential treatment for employee claims, particularly wages and salaries under schedule 8 of the ADGM Insolvency Regulations 2022, though such claims may be proportionally reduced where assets are insufficient.

This Practice Note outlines the statutory protections, payment priorities, and procedural requirements under each regime, to enable practitioners to effectively advise employers, insolvency trustees, and employees navigating insolvency proceedings.

For the purpose of this Practice Note, the key terms under the insolvency regimes of the DIFC, ADGM, and UAE are set out below.