Nezar Raees – Managing Partner ([email protected])
The principal law governing employment relations in the private sector in Bahrain is Law No. 36 of 2012 (the Labour Law), as amended. Its provisions strongly reflect Bahrain’s clear efforts in protecting employees by stating their basic minimum rights in relation to various matters including leave entitlements, overtime remuneration, basic healthcare and end-of-service indemnity.
The Labour Law defines the term ‘employee’ very broadly in Article 1 as “Every physical person working in return for a wage for an employer and under the latter’s management and supervision.”, this brings clarity to the fact that such rights are granted to all employees in the private sector, making no distinction to whether they are employed on a part-time or full-time basis, and to whether they are local or expatriates.
To ensure the optimum benefit of employees’, the Labour Law gives wide freedom for employers to go beyond the minimum threshold and grant their employees any additional benefits from those it provides. This is confirmed by Article 4 of the Labour Law stipulating “Any condition or agreement in violation of the provisions of this Law shall be deemed null and void even if its date precedes the date of enforcement of this Law, if it prejudices the rights of the workers specified in it. The better benefits or conditions, which are decided or to be decided by virtue of individual or collective labour contracts, labour regulations at the establishment or other, or by virtue of a custom shall remain applicable.”
In this article, we will consider the relevant provisions of the Labour Law and any other law which regulates the rights and benefits granted to employees by virtue of the employment relationship in Bahrain.
To ensure that the legal system in Bahrain is in line with international standards and best practices, Article 39 of the Labour Law provides that employees are not to be discriminated against in wages based on origin, language, religion, sex or ideology. The text of Article 39 stipulates “Discrimination in wages based on sex, origin, language, religion or ideology shall be prohibited.”
Annual leave Entitlement
The annual leave entitlement is enshrined in Article 58 of the Labour Law and is a given right to any employee who has completed one year of service for the employer. It prescribes a minimum of thirty days of leave to employees on full pay annually with the leave accruing at the rate of 2.5 days per month of service. In the circumstance an employee has not completed one year of service for an employer, he/she is entitled to a leave proportional to his/her period of employment.
Although an employee is permitted to receive monetary compensation in lieu of his/her annual leave entitlement, he/she must at minimum have fifteen days of annual leave during any one year including six consecutive days by virtue of Article 59(a) of the Labour Law.
The employer shall decide the timing and duration of the employee’s annual leave taking into consideration the work requirements. This is confirmed by Article 59(a) stipulating: “[…] the employer shall set the dates of the annual leaves in accordance with the requirements and circumstances of the work. The worker shall take his leave on the date and for the period set by the employer.” An exception to this rule exists, however, where employees may determine the timing of their annual leave when the purpose of such leave is to sit an educational exam so long as the employee notifies the employer at least thirty days prior to the leave date(s) as stipulated in Article 61 of the Labour Law.
Recent ruling of the Bahraini Court of Cassation in Challenge No. 147 J.Y. 2020 wherein the Court ruled that:
“”[…] the employee’s entitlement to annual leave only materialises upon the employee completing one year of service with the employer. It is therefore not permissible to request such leave before the expiry of that period. The employee must – pursuant to Article 59 of the same law – at minimum take fifteen days of leave per annum (including at least six consecutive days). The employer is obligated pursuant to Paragraph (c) of that same Article to settle the employee’s leave balance every two years.
Sick Leave Entitlement
Employees who have completed three months of employment in an employer’s service and whose sickness is confirmed by a certificate issued by a governmental health centre or a private clinic approved by the employer are entitled to sick leave. The said sick leave entitlement is regulated by virtue of Article 65 of the Labour Law in the following order: (i) fifteen days of sick leave on full pay; (ii) twenty days of sick leave on half pay; and (iii) twenty days of sick leave without pay, to be granted on an annual basis.
Employees who have entirely used up their sick leave but are still unable to work due to continued sickness are permitted to utilize their annual leave entitlement. In this respect Article 66 of the Labour Law provides “The sick worker may benefit from the balance of his annual leave in addition to his sick leave”.
Recent ruling of the Bahraini Court of Cassation in Challenge No. 89 J.Y. 1995 wherein the Court ruled that:
“”[…] An employee’s illness whose illness is proven either by the physician appointed by the employer or a physician in a health center has the right to sick leave in accordance with the provisions of the Law. Where there are diverging opinions between the physician appointed by the employer and that of a health center as to the duration of treatment of an ill employee, the latter’s certificate should be prevail.
Pilgrimage (Hajj) Leave
Hajj is a pilgrimage made to the Kaaba the “House of God” in the sacred city of Mecca. To ensure a Muslim employee fulfils his/her obligation of undertaking Hajj, the Labour Law provides that a pilgrimage (Hajj) leave is granted to Muslim employees one time during their employment. The said employees are entitled to fourteen days of leave on full pay where they have completed five consecutive years of service to the employer by virtue of Article 67 of the Labour Law.
The employer shall determine the number of employees who are granted with this leave annually. The Hajj leave is regulated under Article 67 which stipulates: “The Muslim worker who spent in the service of his employer five consecutive years shall be entitled to a fourteen day leave with full pay to perform his Hajj (Pilgrimage) obligation. This leave shall be granted once to the worker during his period of service unless he benefited from it during his service with another employer. The employer shall determine the number of workers to be granted such leave of absence in each year in accordance with working requirements, provided priority is given to the worker who has achieved the longest period of continuous employment”.
Additional Leave Entitlements
Notwithstanding the basic leave entitlements granted to all employees, Article 63 of the Labour Law provides various additional leave entitlements to be granted to employees on a full-pay basis in the following circumstances: (1) three days of leave: (i) at the occasion of an employee’s marriage (to be granted one time only); (ii) at the circumstance of death of an employee’s spouse or relative up to the fourth degree of kin; or (iii) at the circumstance of the death of an employee’s spouse’s relative up to the second degree of kin; (2) one day of leave at the occasion of the birth of an employee’s child; (3) one month of leave for a female Muslim employee upon the death of her husband.
It must be observed that a female Muslim employee is also entitled to utilise her annual leave to complete the remaining period of time she is required to observe in accordance with the Islamic Sharia. The said period of time sums up to four months and ten days following her divorce or following the death of her husband, during which she must abstain from remarrying. Should the balance of her annual leave be insufficient, a Muslim female employee is entitled to unpaid leave to adhere to the period of time specified above.
Special Leaves for Female Employees
Female employees are entitled to unpaid childcare leave during their employment to care for their children of up to six years of age. The duration of such leave shall not exceed six months of time and shall be limited to three times throughout the period of their employment by virtue of Article 34 of the Labour Law.
Mothers whom are childbearing are provided further benefits by virtue of the Labour Law, granting them a sixty day maternity leave to care for their infants in order to ensure the better good and well-being of these female employees and their infants. In this respect, Article 32(a) provides that “A female employee shall be entitled to a maternity leave on full pay for sixty days including the period before and after delivery provided, she produces a medical certificate issued by one of the governmental health centres or one of the clinics approved by the employer, indicating the expected delivery date”. The said female employees are also entitled to an extension of their maternity leave with an additional period of fifteen (15) days on no-pay as provided in the continuation of the text of Article 32(a) of the Labour Law. It must also be observed that female employees are prohibited from working in the forty days immediately after the date of their baby’s delivery by virtue of Article 32(b) of the Labour Law.
Upon completion of her maternity leave, and until her child reaches six months of age, a female employee is granted two breastfeeding leaves not less than one hour each by virtue of Article 35 of the Labour Law. The said breastfeeding leaves continue thereafter at lesser time intervals of half an hour each interval until her baby reaches one year of age. The breastfeeding leaves are considered part of the female employee’s working hours. Female employees may choose to combine the breastfeeding leaves into one breastfeeding leave, and the timing of such leaves will be determined by the employer having regard to the employee’s circumstances and the work requirements.
Social insurance coverage is a benefit provided for individuals in Bahrain and is carried out by the Social Insurance Organization (SIO). The said individuals are insured against risks of aging, disability, death, work-related injuries, and unemployment in both public and private sectors by virtue of legislative Decree No. 24 of 1976 promulgating the Social Insurance Law.
In this regard, employers are required to register with the SIO and make the following monthly contributions for the benefit of their employees:
- for Bahraini employees, the employer’s social insurance contribution is twelve percent (12%) while the employee’s social insurance contribution is seven percent (7%), which covers old age, disability, death and unemployment.
- for non-Bahraini employees, the employer’s social insurance contribution is three percent (3%) and the employee’s social insurance contribution is one percent (1%). The maximum monthly earnings subject to contributions are capped at Bahraini Dinars four thousand (BHD4,000).
Where an employee is directed by his/her employer to work additional hours in excess of the working hours as agreed in the contract of employment, such hours are referred to as “Overtime”. Where an employee works overtime hour(s) or part thereof as per the employer’s request, the employee is entitled to receive additional remuneration that than of his/her wage. Where the overtime work was instructed and undertaken during the day (7am to 7pm), the employee will be entitled to receive remuneration at the rate of wage plus twenty five percent (25%). Where the overtime work was instructed and undertaken during the night (7pm to 7am), the employee’s remuneration will increase to wage plus fifty percent (50%).
Overtime is regulated in the Labour Law under Article 54 of the Labour Law which stipulates “The employer may employ the worker for additional hours if so required by the circumstances of the work. The worker shall receive for each additional working hour a wage equivalent to his due wage plus at least 25% for hours worked during the day, and at least 50% for hours worked during the night.”
Recent ruling of the Bahraini Court of Cassation in Challenge No. 1177 J.Y. 2015 wherein the Court explained the entitlement to overtime as follows:
“” It is established that overtime in respect of which an employee is entitled to additional pay, are those additional hours spent by an employee at work beyond the agreed hours of work upon instruction of his/her employer and under the employer’s supervision.
Employees in Bahrain are entitled to a minimum of twenty-four (24) hours of rest per week by virtue of Article 57(a) of the Labour Law. In this respect, Friday is deemed a weekly rest day, but may be replaced by another day subject to the observance of the Friday prayer time where the employee is Muslim.
The employee may be requested by the employer to work on his/her rest day, if the circumstances of work so require. At the occurrence of such event, an employee will, pursuant to Article 57(b), choose between receiving remuneration at the rate of his/her wage plus one hundred and fifty percent (150%) in respect of his/her rest day or another day of rest in lieu.
Employers are required to provide their employees with basic health care by virtue of Article 172 of the Labour Law which stipulates “The employer shall provide basic health care for his employees, regardless of their number, in accordance with the regulations issued by a decision of the Minister of Health in agreement with the Minister”. In this respect, the said Minister issued Decision No. 29 of 2014 (as amended) regulating basic health care for employees as required under Article 172 of the Labour Law.
Article 1 of the Decision necessitates that employees be provided basic health care by their employers through subscription to the basic health care scheme for employees of establishments at the Ministry of Health in Bahrain. The cost of such subscription will be borne by the employer at the rate of BD72 annually in connection to each non-Bahraini employee and BD22.5 in connection to each Bahraini employee.
In pursuance of further developing healthcare in Bahrain, the Health Insurance Law (Decree No. 23 of 2018) (the HIL) was recently issued. Upon its implementation, the HIL will require mandatory health insurance for employees to be achieved through the payment of insurance contributions into a health dedicated fund, which will provide insurance coverage through a mechanism where insurers licensed under the HIL pay beneficiaries’ valid claims. The implementation of the HIL in Bahrain will make it mandatory for employers to: (i) register all foreign employees for the mandatory health insurance under Article 29(a) of HIL; and (ii) pay the premiums on their behalf to the Health Insurance Fund under Article 28(a)(2) of HIL. The said obligations will extend to the employees’ dependents if the contract of employment provides for the same.
Expat employees not benefiting from the social insurance under the Social Insurance Law are entitled upon termination of their employment contract to a reward equivalent to the wage of: (i) half a month per year of service the first three years of their employment; (ii) one month for each subsequent year, and; (iii) pro-rata the period of employment for the fraction of a year in the employer’s employment. In this respect, Article 116 stipulates “The worker not subject to the provisions of the Social Insurance Law shall be entitled upon the termination of his contract 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. The worker shall be entitled to a reward for the fraction of a year pro rata the period of service he spent with the employer”.
Ruling of the Bahraini Court of Cassation in Challenge No. 11 J.Y. 2018 wherein the Court ruled:
“”It is established that pursuant to Article 47 of the Labour Law (36/2012) that the employee’s rights pertaining to leaving indemnity and payment in lieu of annual leave are calculated by reference to the employee’s basic wage plus any social allowance to which the employee is entitled.
Certificate of Service
The employee is entitled to a certificate of service containing the information he/she requests regarding the following: (i) date of start of employment; (ii) type of work undertaken; (iii) wage and other benefits received by the employee; (iv) the employee’s experience and professional competence; and (vi) the date and reason for termination of employment. This is confirmed by Article 13 of the Labour Law stipulating: “The employer shall give the worker – during the validity period of the labour contract or upon its termination and free of charge – a certificate including the requested data on 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 labour contract”.
Ruling of the Bahraini Court of Cassation in Challenge No. 28 J.Y. 2017 wherein the Court set out the information which the employer must include in a certificate of service stating:
“”Given that the purpose of proving the employee with a certificate of service after cessation of his/her employment is to facilitate the employee’s joining another employer, the Bahraini legislator did not wish to leave it to the employer to determine the information to be incorporated therein. It stipulated in Article 13 of the Labour Law (36/2012) that it should include the date of joining, type of work undertaken, wage and other benefits, experience and competency, and the date and reason for termination of employment.
Ruling of the Bahraini Court of Cassation in Challenge No. 623 J.Y. 2008 wherein the Court set out the information which the employer must include in a certificate of service stating:
“”It is established by this Court that while in principle, the entitlement to leaving indemnity only arises at the end of the employee’s employment, there is nothing in the law that prevents the employer from agreeing with the employee to pay it in any manner including advancing part of it subject to the balance being satisfied on completion of the employee’s services without prejudicing his legal established rights.
The employer will bear the costs of returning the expat employee to his/her homeland following the termination of the work relationship or the expiration or cancellation of the work permit pursuant to Article 27(a) of Law No. 19 of 2006 promulgating the Regulation of the Labour Market (the LMRA Law). Article 27(a) of the LMRA Law stipulates: “At the end of the Employment contract or the cancellation of the work permit, the last employer for whom the permit for employing the expat worker concerned was issued shall be obliged to meet the expenses of the latter’s repatriation to a location specified in the employment contract or, if the said contract did not specify such a location, the employer shall meet the expenses of repatriating the expat worker concerned to a place to which he belongs by nationality. Such employers shall also meet the expenses of preparing and transporting the body of a deceased expat worker to the latter’s home country or place of residence should his family so request.”
In pursuance of further preserving employee’s rights, the Labour Law provides that all labour-related actions, fees on certificates and copies requested, complaints and claims submitted by the employee be exempt from judicial fees by virtue of Article 6 of the Labour Law.
It is evident that laws in Bahrain firmly favour the interest of employees and seek to safeguard their rights. The employment relationship provides wide-ranging benefits for employees in respect of various matters such as leave entitlements, basic healthcare, social insurance coverage, end-of-service indemnity and the certificate of service. Providing employees with these benefits aid in maintaining a professional work environment resulting in an increase in work productivity, the prosperity of business establishments and support to the judicial system in settling employment related disputes.
For more information, please contact us on [email protected].