ADGM employment claims: Get your settlement agreement right

Mohamed Muzaffer Nahvi v. Reem Hospital Ltd & Anor [2026] ADGMCFI 0026

Many employers view a signed "full and final settlement" as the final chapter in an employment dispute. A recent ADGM Court decision is a useful reminder that this is only true if the agreement complies with the ADGM Employment Regulations.

In this case, the employer believed it had obtained a complete waiver of claims. However, the Court found that the settlement was ineffective because it did not include a warranty by the employee that they had been given the opportunity to obtain independent legal advice on the terms and effect of entering into the agreement, as required by section 1(2)(d) of the ADGM Employment Regulations 2024. As a result, the employee was able to pursue his claims despite having signed a "full and final settlement".

Despite overcoming the waiver of claims hurdle, the employee lost on every issue. The claim was dismissed in its entirety and costs were awarded to the employer.

At its core, the judgment reinforces a simple principle: employment litigation should not be a "throw the kitchen sink" exercise. Employees must (i) identify a legal cause of action; and (ii) plead and prove every essential element of the legal test of the cause of action. A collection of workplace grievances will not, by itself, give rise to a successful claim.

Settlement agreements are only as strong as their drafting

The Court accepted that the settlement was intended to operate as a broad waiver of claims. However, broad waiver language could not overcome a failure to comply with the statutory requirements. The agreement did not include the employee's warranty that they had been given the opportunity to obtain independent legal advice on the terms and effect of entering into the agreement, a requirement under section 1(2)(d) of the ADGM Employment Regulations 2024. Because that statutory requirement was not met, the settlement failed in its primary objective of preventing future claims under the ADGM Employment Regulations.

Discretionary bonuses remain discretionary

The employee's principal grievance related to a senior leadership bonus that he believed should have been paid. The Court rejected the claim, emphasising that the bonus was not a contractual entitlement and remained subject to board discretion. In the absence of evidence that the discretion had been exercised arbitrarily, irrationally, discriminatorily or in bad faith, the Court was unwilling to second-guess the employer's decision. This is an important reminder to employees who feel “hard done by” at not being awarded a bonus.

A lawful termination does not become wrongful because it is unpopular

The employee also challenged his dismissal, alleging that the redundancy was a sham and that the termination was unlawful. The Court disagreed. The employer had exercised an express contractual right to terminate on notice and had provided the required notice of termination and final payments. In those circumstances, the termination was lawful. The Court considered it unnecessary to determine whether the redundancy rationale itself was correct. 

Employment claims need more than dissatisfaction

The employee advanced multiple claims relating to bonus payments, redundancy, insurance and reputational harm. However, the Court repeatedly returned to the same question: what legal right had been breached, and what evidence supported that allegation?

The judgment is a useful reminder that not every workplace grievance becomes a legal claim. Feeling aggrieved, disagreeing with a management decision or believing that an outcome was unfair does not, in itself, create a cause of action. As this case demonstrates, employment litigation should not be an exercise in ‘throwing the kitchen sink” by asserting every workplace complaint in the hope that something succeeds.

Key takeaways

Settlement agreements must be reviewed carefully for compliance with the ADGM Employment Regulations. A small mistake can result in the whole agreement being useless for the purposes of waiving rights under the ADGM Employment Regulations.

Even where employees advance claims in in good faith, they will be exposed to adverse costs orders if they are unsuccessful in the ADGM Courts.