Bahrain Employment Law and Employee Rights
Law Number 36 of 2012, the promulgation of the labor law in the private sector (the “Law”) repealed and replaced the more archaic Labor Law for the Private Sector, Law Number 23 of 1976. The New Law is a milestone for the private sector as it revitalizes the private sector labor market, whilst further enhancing the rights of employees and simultaneously protecting employers’ rights.
The Law imposes onerous provisions on employers and has brought significant changes to the provisions relating to employees’ leave entitlements, their end-of-service leaving indemnity, the rights of female employees and penalties. The Law is thus arguably more aligned with international standards and better equipped for modern-day society.
The Law offers protection to all types of employees regardless of whether they are part-time, full-time, local or expatriate employees. An employee, under the Law, is defined as every natural person employed in consideration of a wage by an employer and under his management or supervision.
The contracts of employment shall be in writing, in Arabic and where a contract is drawn up in a foreign language, it shall be accompanied by an Arabic translated version as per Article 19 of the Law. In case of absence of a written labor contract, the worker may solely prove all of his rights through all means of proof.
The Law sets down minimum threshold in some cases such as 30 days of annual leave and 55 days of sick leave allowance (15 days with full pay, 20 days with half-pay and 20 days without pay). However, the Law sets down a maximum threshold in some other cases such as eight working hours. The employers are free to amend within the commanding principals of the Law.
The employment claims are filed in the Labor Case Administration Office. However, the employer and employee may mutually agree to refer the dispute to the individual Labor Dispute Settlement Authority at the Ministry before taking the dispute to the Courts.
Protection against Discrimination
As per Article 39 of the Law, discrimination in wages based on sex, origin, language, religion or ideology shall be prohibited. As per Article 29 of the Law, female workers shall be subject to all of the provisions governing the employment of male workers without any discrimination in similar situations. The defenses to a discrimination claim are subject to the Law of Evidence where the employer may offer testimonies and other documents to substantiate the contrary.
Article 192 of the Law states that any employee who, during his work, sexually harasses any of his colleagues, by reference, by word, by deed or by any other means, shall be punished by imprisonment for a maximum period of a year or by a maximum fine of 100 Dinars. If this is committed by the employer or his representative, the punishment would be imprisonment for a minimum period of six months or a fine ranging from 500 Dinars to 1,000 Dinars.
The Law distinguishes between dismissal without a justifiable cause and unfair dismissal. Where the employee is dismissed on discriminatory grounds, it is considered as unfair dismissal. The compensation differs for each type of dismissal based on the employee's term of the contract. If the contract is for an indefinite term, the employee shall be entitled to compensation of two days' wages for each month of service, provided not less than one month's wages up to a maximum of 12 months' wages when the employee is dismissed without a justifiable cause. If the contract is for a fixed term, the employee on being unfairly dismissed shall be entitled to compensation of wages for the remaining period of the contract unless the parties have mutually agreed at a lesser compensation, provided that the agreed compensation is not below the three months' wages or the remaining period of the contract, whichever is lesser. The employee in all cases is also entitled to additional compensation equivalent to half of the laid down compensations due unless the contract provides for higher compensation.
In case of mass dismissal, the employer and the employees shall aim to initially settle the dispute amicably. If no agreement is reached within a period of 60 days, either employer or employees may request the Ministry for referring the dispute to the Collective Dispute Settlement Board (CDSB) and where the CDSB does not resolve within 60 days, the employer or employees may request the Ministry to refer the dispute to the arbitral tribunal. The arbitral tribunal shall issue an enforceable binding award.
Article 68 of the Law regulates the work by stating that the employer shall maintain a special file for each employee including in particular, the employee's name, age, residential address, marital status, residential address, nationality, job or occupation and qualification and experiences, date of employment, current wage, and all modifications to this wage, the leaves, the date of termination of service and the reasons thereof. The employer shall keep the minutes of investigations conducted with the employee, and his supervisors' reports on the level of his performance of the work as per the work regulations. The employer shall keep the worker's file for at least for two years from the date of termination of the work contract. The data is considered as personal data and is not transferred freely to other countries except upon obtaining employee's consent.
Article 41 of the Law stipulates that the employer shall not transfer an employee employed on a monthly basis to an employee employed on a daily, weekly, piece-work or hourly basis, without the employee’s written consent in accordance with the provisions of the Law. Article 42 of the Law states that the employer shall not force the employee to purchase foodstuffs, goods or services produced or offered by the employer or from specific establishments owned by him or by a third party.
Article 50 of the Law specifies that the night shift workers and those under the occupational confinement system shall receive compensation for the nature of their job. The worker may not be employed for more than eight hours per day unless otherwise agreed upon, provided the working hours do not exceed ten hours per day. However, no worker shall be present at the workplace exceeding eleven hours a day calculated from the time of entering until the departure therefrom. The employer can employ the worker for additional hours provided the worker receives a wage for each additional working hour equivalent to his due wage plus at least 25 percent for hours worked during the day, and a minimum of 50 percent for hours worked during the night.
The employee having spent in the service of the employer at least one year is entitled to a paid annual leave of a minimum of thirty days, with an average of two and a half-day for each month. Where the period spent in the service of the employer is less than one year, the worker shall be entitled to a leave corresponding to the period of his work. Article 61 of the Law gives the employee the right to determine the date of his annual leave in case he is applying for an exam in any of the educational stages provided the employer is notified not less than thirty days prior to the date of the intended annual leave. Article 62 of the Law, however, grants the employer the right to deprive the employee of his wage during his annual leave if it is evidenced that the employee was employed by another employer during the said leave, without prejudice to the disciplinary liability in this respect.
Article 63 of the Law entitles the worker to a three day leave on full pay in the event of:
- his marriage for one time;
- the death of his/her spouse or any of his/her relatives to the fourth degree of kin;
- death of his/her spouse’s relatives to the second degree of kin.
The female employees are entitled to maternity leave on full pay for 60 days, including the period before and after the confinement, provided they produce a medical certificate attested by a government health center or a clinic approved by the employer stating the expected date of her confinement. A female employee is entitled to obtain leave without pay for providing care to her child who has not attained more than six years of age for a maximum of six months, three times throughout the period of her service. The female employee, after her maternity leave and until her child is six months of age, is entitled to two periods to suckle her newly born child, each of which shall not be less than one hour. She is also entitled to two periods of care for 30 minutes each until her child completes one year of age. The female employee may combine these two periods, and such two additional periods shall be considered as part of the working hours without any reduction in her wage.
Article 67 of the Law entitles the Muslim worker, who spent five consecutive years in the service of his employer, to a fourteen-day leave with full pay to perform his Hajj (Pilgrimage) obligation. This leave should be granted once to the worker during the period of service unless he availed it during his service with another employer. The employer determines the number of employees to be granted such leave in each year depending on the working requirements, priority given to the employee who has achieved the longest period of continuous employment.
Termination of Employment
As per Article 110 of the Law, when the employer is forced to dismiss a few employees due to downscaling of business or reorganization or even if due to partial disclosure, the local Bahraini employees must be retained if it would be possible to terminate the foreign employee possessing the same competence and experience as the local employee.
Under Article 99 of the Law, either party to the contract may terminate the contract following the notification to the other party at least thirty days before the date of the termination. Hence, under the Law, the employer is obliged to serve a termination notice should it wish to dismiss an employee. However, the employers shall be bound to follow a longer notice period if it is mentioned so in the contract. When the employer fails to serve the notice in a timely manner, the employee would be entitled to the wages for the notice period.
Employee's Entitlements upon Termination
Apart from the Notice Period Wages, there are other entitlements the employee can avail upon termination.
- Balance of Leave (Article 59 of the Law)
The employee shall be entitled to 30 days of annual leave, and the employee shall receive wage corresponding to the accrued leave days.
- Travel Tickets (Article 27 of the Labor Market Regulatory Law)
The expatriates shall be entitled to a return travel ticket to their home country if they do not commence working with another employer within Bahrain.
- End of Service (Article 116 of the Law)
The employee, not benefitting from the provisions of the Social Insurance Law shall be entitled to a reward equivalent to the wage of half a month for each year of service for the first three years and the wage of one month for each subsequent year upon the termination of his contract. The employee is entitled to receive his leaving indemnity for a fraction of a year proportionate to the period of service he spent with the employer. The calculation is based on the employee's most recent wage, excluding all allowances except social allowance. A Bahraini employee receiving a salary exceeding 4,000 Dinars is entitled to the leave indemnity concerning the amount in excess of the 4,000 Dinars only (Article 17 of the Social Insurance Law).
- End of Service Certificate (Article 13 of the Law)
The employer is obligated to give his employee an end of service certificate, free of charge, confirming the date of employment, the type of work performed, the wage and other benefits he obtained, his experience, occupational competency, and the date and reason for termination of the labor contract.
- Non-Competition Restriction
The non-competition restriction is valid only if the employee shall have attained 18 years of age at the time of concluding the contract. The restriction shall be limited as to a time period which must not exceed one year after the termination of the employment contract and shall be limited in terms of place and type of work as necessary to protect the legitimate interests of the employer. The employer may not rely on such restriction if the employee has had a justifiable reason to terminate the employment contract.
The Law strongly favors the interests of the employee over that of the employer. Nonetheless, the Law also provides a clear mechanism for calculating compensation upon termination, encouraging out of court settlements and thus reducing litigation costs for employers. Overall, the Law ultimately introduces more efficient and effective employment regulations that are in line with current international standards and best practices. There are considerably fewer disputes processed through the courts, thus reducing the number of frivolous cases filed by disgruntled employees.