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LabourLawinBahrain

TheLabourLawforthePrivateSector(LawNo.36of2012,knownasNewLabourLaw),isnoweffectiveand
replacestheoldLabourLawforthePrivateSector(No.23of1976).
TheNewLabourLawhasintroducedseveralpositivesintothemarket,andhasworkedpositivelyoncertain
issuessuchaswomensrights,recognitionofdomesticstaffrights,nondiscriminatorypracticesandspeedy
resolutionoflabourdisputes,whichotherwisetookuptofiveyearstoresolvethroughcourts.
TheNewLabourLawisinlinewithinternationalstandardsasitalignsdomesticlawwithmajorityofAraband
internationallabourtreaties.Aimingtointroducemorecosteffectiveandefficientemploymentregulations,
fewerdisputesareexpected,anditwillbeprocessedthroughthecourts,whichwillalsointurnreducethe
numberoffrivolouscases.

RecruitmentandRegistration
TheemployershouldregisterallexpatriatesintheKingdomofBahrainwithLabourMarketRegulatory
Authority(LMRA)andreceiveavalidresidencepermitandworkpermit.Expatriateemployeesareprohibited
frominvolvinginanyworkintheKingdomofBahrain,andemployersareprohibitedfromemploying
foreignerswithoutavalidworkpermit.ToworkinBahrain,foreignemployeesshouldbemedicallyfit,should
haveenteredthecountrylawfully,andpossessavalidpassport,andretainaresidencepermitandwork
permit.
Duringtheprocessofrecruitment,anemployershouldgiveprioritytoemploymentofBahraininationals,
followedbyArabnationals,iftheyareavailableandpossessrequisiteskillsandcompetencefortherole.
SomebusinessesrequirethemandatoryminimumratioofBahraininationalstonumberofnonBahraini
nationals.EmployersbylawarenotallowedtodiscriminatebetweenBahrainiandnonBahraininationals
particularlywithregardtopayorsubjectanyemployeetoanyotherformofdetrimentaltreatment.

EmploymentContract
Theemploymentcontractshouldincludethetermsofemploymentagreedbytheparties,andmaybe
enteredintoforafixedterm,orforanindefiniteduration,whichcanbeterminatedonnotice,orfor
executionofaspecificproject.
Theemploymentcontractoutlinesthatthetermsandconditionsofemploymentshouldbeinwriting.It
shouldcomplywiththeBahrainLabourLawforPrivateSector,andanytermorcontractthatdoesnotabide
bythelawwillbeconsiderednullandvoid,exceptthatitismorefavourabletotheemployee.
TheemploymentcontractshallbeinwritingandwillbewritteninbothArabicandEnglish,andeachpartywill
begivenacopy.Theemploymentcontractwillincludetheseessentialdataofbothparties,andinparticular,
thefollowingdetails:
Employersname,addressandtraderegisternumber.
Workersname,dateofbirth,qualifications,occupation,residentialaddress,nationalityand
personalidentificationdocuments.
Nature,typeanddurationofthecontract,ifforadefiniteperiod.
Thewageagreedupon,thetimeandmethodofpayment,andallofthebenefitsincashorinkind
asagreedupon.
OtherdatadeterminedbyvirtueoftheMinistersdecision.

Probation
Aworkermaybeemployedunderaprobationperiod,ifexpresslyspecifiedinthelabourcontract,provided,
theperioddoesnotexceedthreemonths.Theperiodofprobationmaybeincreasedincertainoccupations,
asdeterminedbyvirtueofMinistersdecision,butdoesnotexceedsixmonths.
Eitherpartymayterminatealabourcontractduringperiodofprobation,ifsaidpartyfindsthatits
continuanceisnotappropriate,provided,thepartyterminatingthecontractnotifiestheotherpartyatleasta
daybeforethedateoftermination.
Theemployercannotemployanyworkerunderprobationmorethanonce.

Insurance
EmployersshouldregistertheiremployeesintheKingdomofBahrainwithMinistryofLabourandSocial
Affairs,andreceivecertificateofregistration.ItshouldalsoregisteritsemployeeswithGeneralOrganization
forSocialInsurance(GOSI)andcontributionshouldbepaidmonthlyforcompulsoryinsuranceagainstold
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age,deathanddisability,andagainstworkrelatedinjuriesincludingdeath(forallemployees).
Employerscanalsoconsidernoncompulsoryinsurancessuchasprivatemedicalorlifeinsurance.

Wages
Wagesareconsideredtobethetotalremunerationpayableincashorinkindtoanemployeeunderan
employmentcontract,andisinclusiveofadditionalincrements,gratuitypaymentsandallowances,ifany
(suchascommissions,bonuses,transportallowance,accommodationetc.)
Anemployershouldnotexcludespecificpaymentsfromcalculationofwagesinthecontract,andanysuch
exclusionwillbeviolationoflaw.However,theemployerhastherighttodecideoninclusionofcertain
paymentssuchasphonebills,companycarcostsandrent(ifpaiddirectlytotheLandlordratherthantothe
employee)andmaybeexcludedfromwages.
Thereisnonationalminimumwageandordersareissuedfromtimetotimesettingupminimumwagesin
particularindustrysectors.Wagesmaybecalculatedbythehour,day,week,ormonth,onapiecerateor
perproduction.Wagesshouldneverbebasedoncountryoforigin,sex,language,religionorideology,and
suchapracticeisprohibited.
WageswillbepaidinBahraincurrencyandanagreementmaybeconcludedforpaymentinalegaltender
currency.
Thecalculationofcompensationtoanemployeeintheeventofhisorherunfairdismissalorunjustified
terminationbytheemployerisclearlymentionedintheNewLabourLaw,anditoffersclearmechanismfor
calculationofsuchcompensation.
Onterminationofemployment,aworkershallbeimmediatelypaidhiswagesandallamountsduetohim.
But,iftheemployeeterminateshisemploymentonhis/herownaccord,theemployerisrequiredtopaythe
workerswageandallhisentitlementswithinsevendaysasofdateonwhichtheworkerleaveshiswork.
Anemployeesentitlementpertainingtocalculationofhisleavingindemnitypaymentshouldbecalculated
basedonthemostrecentbasicwageandsocialallowanceifany,drawnbytheemployee.
Iftheemployershowsdelayindisbursementofworkerswage,employershallpaytheemployeeanannual
compensationequivalentto6percentofthewageinrespectofwhich,adelaywasshownduringthesix
monthsorlessofthedateofpaymentofthewage.Thisratewillbeincreasedby1%foreachmonthof
delay,afterthesaidperiod,notexceeding12%ofthewageperyear.
Ifthecircumstancessorequire,anemployercanemploytheemployeeforadditionalhoursofwork,
provided,theemployeeisgivenawageequivalenttohisduewageplus25%forhoursworkedduringthe
day,andatleast50%forhoursworkedatnight.

Workhours/leaves
Anemployeecannotberequiredtoworkformorethansixdaysinanygivenweek.Fridaysaredeemedto
betheweeklydayofrestonfullpay.Theemployeeisalsoeligibletoleaveforofficialpublicholidays.In
casesuchpublicholidaysoccuronaFriday,theemployershouldcompensatetheemployeewithonefurther
dayofrest.
Theemployermaysometimesrequiretheemployeetoworkonpublicholidays,oronFridays,subjectto
provisionsoflocallaw.Exceptforcasesspecifiedinthelaw,aMuslimworkershouldnotbeemployedduring
themonthofRamadanformorethansixhoursaday,orthirtysixhoursaweek.
TheMinistermayissueadecisionregardingincreasingminimumworkhoursforcertaincategoryofworkers
orforcertainindustries,incasethecircumstancesandnatureoftheworksorequire.
AnnualLeave:Allemployeesareeligiblefora30daypaidannualleaveoncompletionofatleastoneyear
ofservice,accruingattherateoftwoandahalfdaysforeverymonth(earlierannualleavewasgranted
onlyafterfiveyearsofserviceforupto28daysmaximum).
Iftheperiodspentinserviceislessthanayear,theworkershallbeentitledtoleavecorrespondingto
periodofhiswork.But,thenewLabourLawstatesthattheworkercannotwaivehisrighttoleaveand
receivemonetarycompensationinreturnforthesaidleave.
SickLeave:Duringanillness,anemployeeiseligiblefor15daysofsickleaveonfullpay,20daysonhalf
payand20furtherdayswithoutpay.Entitlementstosickleaveonfullorhalfpaymaybeaccumulatedfor
upto240days(was182daysearlier)duringtheemployeesservice.
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Pilgrimageleave:IncaseofMuslimemployeeswhoareemployedinthesamecompanyforfive
consecutiveyears,theyareeligibletoleaveontwoweeksoffullpayonceduringhis/heremploymentto
performhis/herHaj.
MaternityLeave:Afemaleemployeeiseligibletomaternityleaveoffortyfivedaysonfullpayandthis
periodmaybeextendedbyanotherfifteendayswithoutpay.Onreturning,theemployeewillbeeligiblefor
anadditionalhoureachdayfornursingforaperiodoftwoyearsfromthedateofhavinggivenbirth.
ContingencyLeave:TheNewLabourLawhasintroducedanewprovisionwhereintheemployeehasthe
righttotakeleaveonalastminutebasisincaseofanemergency,callingfortheirurgentneedtoremainoff
duty.Suchcontingencyleaveshallnotbetakenforaperiodnotexceedingsixdaysduringtheyear,with
maximumoftwodaysineachcase,andthisissetoffagainsttheemployeesannualleave.
EducationalLeave:AsAnemployeeisgiventherightunderthenewlawtoschedulehisleaveintheevent
thathehastositforanexaminationatanyeducationallevel,provided,thatthenoticeofthesameisgiven
totheemployeratleastthirtydaysaheadofthedateoftakingsuchleave.
IddaPeriod:IncaseofMuslimfemaleworker,sheshallbeentitledtoonemonthpaidleaveintheeventof
deathofherspouse.SheisalsoentitledtocompletetheIddaperiodofthreemonthsandtendaysfromher
annualleave,andincasethebalanceofherannualleaveisinsufficient,shemaytakeunpaidleave.

DisputeResolution/Disciplinaryaction
Anyemployerwithtenormoreworkersshouldestablishrulesinrespectofworkplaceandadisciplinary
procedure,approvedbytheLabourMinistryofSocialAffairsshouldbedisplayedandundertaken.
Iftheemployerwantstotakedisciplinaryactionordismissanemployee,heshouldgobytheprovisionsof
thelaw.Thedisciplinarymeasuresthatcanbeundertakenagainstanemployeeincludefines,suspension,
warningsanddismissal.
Ifanemployer/employeeintendtomakeacomplaint,heshouldfirstfollowthestatutoryprocedure
applicabletoalllabourdisputes.AclaimmustbepresentedtotheLabourMinistry,whichinturnwillreferthe
disputetothecourt.
TheNewLabourLawaimstominimizethesettlementofcasesgoingthroughcourts.Therefore,allclaimsare
nowfiledwithLabourCaseAdministrationOffice,wherein,theLabourCaseAdministrationJudgewillhearthe
caseandprepareareport,aimingtoreachanamicablesettlement.
However,ifthepartiesdonotreachanamicablesettlement,theLabourCaseAdminjudgepassesonthe
mattertotheHighCivilCourt,whowillthenhearthelabourdisputeonanurgentbasiswithintwomonths
fromdateoffilingthecase,andthejudgementshouldberenderedwithin30daysfromthedateofitsfirst
hearing.ThedecisionofthehighcourtjudgeisfinalandthepartiesmayappealtoCourtofCassationonly
onmattersoflaw.
Usually,thesettlementofdisputesbetweenworkersandemployersturnsouttobeatardyandtime
consumingprocedureasthesponsorsdonotoftenturnupforhearing,andwhenthereisacasepending,
theworkersarenotpermittedtoworkoutsideBahrain.But,theworkercanauthorizelawyersinBahrainto
continuethecaseinCourtonhisbehalf.ForthosewhoarenotunderthepurviewofLabourLaws,suchas
housemaids,theInteriorMinistryistheagencytobeapproachedfordisputesettlement.

Terminationofemploymentcontract
Iftheemployerterminatesanemploymentcontractwithinthefirstthreemonthsfromitseffectivedate,the
employeewillnotbeeligibleforcompensation.However,incaseithasbeenestablishedthattheemployee
hasbeenmetwithanunfairdismissalfromtheemployer,theArticles104and105ofNewLabourLaw
permitstheemployeetoreceivecompensationequivalenttoonemonthswages.
Ifthecontractenteredintoisforadefiniteperiod,itautomaticallyterminatesattheendofprescribed
period,unlessthepartiesdecidetoabidebyitstermsevenafterexpiryofthecontract.
Acontractenteredintoforanindefinitedurationcanbeterminatedbyeitherpartygivennolessthanthirty
daysofnotice,unlessalongernoticeperiodisopenlyagreedbetweentheparties.
Employersneedtobecautiousandtakeadviceonthepossiblerightsandremedybeforedismissalofan
employeewhomhewishestodismiss,astheemployeemayhaveapotentialstatutoryclaimfor
compensationbasedonterminationonunlawfulgrounds.

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Iftheemployerterminatesanemploymentcontractforanindefinitedurationwithinthefirstthreemonths
fromeffectivedateofthecontract,theemployeewillnotbeeligibleforanycompensation.However,inthe
eventthatthedismissalisunfair,basedondefinitionofunfair(Articles104and105ofNewLabourLaw),
thentheemployeewillbeeligibleforequivalentofonemonthswages.
Iftheemployeeterminatesacontractofemploymentforanindefinitedurationwithoutcauseorforan
unlawfulcauseafterfirstthreemonthsfollowingthecommencementofcontract,theemployeewillbe
entitledfortwodayswagesforeverymonthofservice.
Intheeventofunfairdismissal,theemployeewouldbeeligibleforanotheronehalfofthecompensation
determinedforunjustifiedterminationofaforementioned.Ithastobenotedthatwhencalculatingthe
amountofcompensation,duefractionsofamonthareconsideredascompletemonth.
Incaseofemploymentcontractwithdefiniteduration,ifthedismissalwasforanunlawfulcause,the
compensationamountwillbeequivalentofwagesforremainingperiodofthefixedterm.But,thepartiescan
alsoagreeforalesseramountmutually,but,thecompensationshouldnotbelessthanthreemonthswages,
orrestofthecontract,whicheverisless.
Iftheemploymentcontractisonlyforcompletionofspecificworkandthecontractwasterminatedwithout
causepriortoitscompletion,theemployeewouldbeeligibleforthewageforremainingperiodrequiredfor
completionoftheagreedwork,
Someunjustifiedterminationsare:
Terminationbyreasonofredundancyispotentiallylawful.
Terminationofafemaleemployeeongroundsofmarriage,pregnancyormaternity.
Terminationwithoutapplyinglawfuldisciplinaryrulesandmeasures.
Terminationduringsickleaveoranyotherlawfulleave
Refusingtoreinstateemployeeswhohavebeensuspendedpendinginvestigation.
Somejustifiedterminationsinclude:
TheNewLabourLawgrantstheemployertherighttoterminateanemployeeintheeventofpoor
performance.Therighttoterminatetheemployeeissubjecttoemployergivingtheemployeea
minimumnoticeperiodofsixtydaysincaseofpoorperformanceorinefficiency,toallowthe
employeereasonabletimetoimproveperformance,andfailureofwhich,wouldjustifythe
terminationoftheemployeeandnotentitletheemployeetoanycompensation.
TheNewLabourLawallowsanemployertoterminateanemployeeintheeventoftotalorpartial
closureoftheirestablishment,itsscalingdown,orreplacementoftheproductionsystem,whichin
turnwouldaffectthesizeoftheworkforce.But,anoticeandreasonforsuchaterminationshould
beproducedtoMinistryofLabour,30dayspriortoservingnoticeofterminationtotheemployee.
Theamountofcompensationinsucheventswouldalsobefixedbythelaw.
Thelabourcontractforadefiniteperiodautomaticallyexpiresafteritsterm,andunlessrenewed
foranotherterm,itautomaticallyendsthetermoftheemployeeinthecompany.
Anemployermayterminatetheemployeeifthelatterhassubmittedfalseidentityorfake
certificatesorrecommendations.
Iftheemployeehascommittedamistakethatcausedseriousmateriallosstotheemployer,
provided,theemployerreportssuchamattertothecompetentauthoritieswithintwoworking
daysasofthedateonwhichtheoccurrenceofthisseriousmateriallosswasbroughttohis
knowledge.
Iftheemployee,despitewarnings,failstocomplywithwritteninstructionsrequiredtobeobserved
forsafetyofworkersandestablishment.
Iftheemployeeisabsentwithoutreasonablecauseformorethantwentynonconsecutivedaysor
formorethantenconsecutivedaysinayear,providedthatsuchterminationshallbeprecededby
awrittenwarningbytheemployertotheemployeeafteranabsenceoftendaysintheformer
caseandfivedaysinthelattercase.
Iftheemployeedoesnotperformhisobligationsbyvirtueoflabourcontract,and/orifthe
employeedisclosestheworkrelatedsecretswithoutwrittenauthorizationbytheemployer.
Thelabourcontractshallbeterminatedduetoworkerstotaldisabilitytoexecutedutiesofhis
work,irrespectiveofcauseofsaiddisability.
Intheeventofdeathoftheemployee,thelabourcontractwillbedeemedterminated.However,in
theeventofdeathofemployerthecontractshallnotbedeemedasterminatedunless,the
contractisconcludedforconsiderationspertainingtoemployerspersonorhisoccupational
activitywhichautomaticallystopsbyhisdeath.
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Theemployeemayterminatethelabourcontractwithoutnotificationduetoanytwooftheeventssuchas
employerassaultingtheemployeeduringorasaresultofthework,eitherverballyorphysically,orifthe
employerorhisrepresentativescommitanactprejudicingethicsagainsttheemployeeoranyofhisfamily
members.

Employmentofminors
Aspertheprovisionsofthelaw,aminorshallbeapersonwhoisoffifteenyearsofage,butwhohasnotyet
attainedtheageofeighteenyears.Itshallbeprohibitedtoemployanyminorwhohasnotyetattainedthe
ageoffifteenyears.
Minorsarenottobeemployedforaperiodexceedingsixhoursaday,andshallnotbepermittedtoremain
intheworkplacesformorethansevenconsecutivehours.
Theyshouldbegivenoneormoreintervalsduringworkhours,thetotalofwhichshallnotbelessthanhour,
forrestandameal.Theintervalsshouldbesoarrangedthataminorshallnotworkformorethanfour
consecutivehours.
Itisagainstlawtooccupyminorsduringthenightperiodoronweeklyrestdaysorofficialholidays.

Employmentofwomen
TheNewLabouurLawinBahrainismorefavourabletowomen,anddoesnotimposetoomanyrestrictions,
unlessprohibitedpursuanttoaresolutionoftheLabourMinister.
Anondiscriminationclausehasalsobeeninsertedinthenewlaw,whichemphasizesthatfemaleemployees
shallbesubjecttoallprovisionsgoverningtheemploymentofemployeeswithoutdiscriminationbetween
maleandfemaleemployees,whentheemploymentconditionsaresimilar.
Otherprivilegesforwomenemployeesareincreasedperiodofmaternityleaveof60daysandnursinghours
(twonursingperiodsofnotlessthanonehoureach)onfullpay.Femaleemployeeshavealsobeengiventhe
righttotakeuptosixmonthsleavewithoutpayuptothreetimesthroughoutherperiodofservicewiththe
employerforpurposessuchascaringforherchildwhoislessthansixyearsofage.
However,therearecertaincases,worksandoccasions,inwhichwomenmaynotbeemployedatnight,and
theMinistrywillmakeadecisioninsuchmattersafterdeterminingthecase.
Employersshouldnotterminatethelabourcontractofafemaleworkeronreasonssuchashermarriageor
duringhermaternityleave.

Retirementage
AspertheNewLabourLaw,theretirementageinBahrainis60yearsforbothmaleandfemaleemployees.

LeavingIndemnity
EmployeeswhoarenotsubjecttoBahrainSocialInsuranceLaws(expatemployeesandBahrainiemployees
whosesalariesexceedBD4000)thecalculationofleavingindemnityundertheNewLabourLawwouldbe
sameasthatduringoldlawirrespectiveofwhoterminatedorwhytheemploymentrelationshipwas
terminated.TheleavingindemnityispayableonterminationofemploymentofanonBahraininational,which
iscalculatedbasedonastatutoryformulawhichtakesintoaccounttheemployeeslengthofserviceand
whethertheemploymenthasbeenterminatedbytheemployerortheemployee.
Note:Theinformationprovidedinthisarticleonlyservesasageneralguidetothesubjectmatter.
Professionaladviceshouldbesoughtonanyspecificmatter,aslawscanchangefromtimeto
time.

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