One of the consequences of the COVID 19 pandemic has been job losses around the globe, as businesses struggled to deal with the imposed lock-downs and uncertainty over how long such restrictions would last. Bahrain has been no exception to this. As a result, we have seen an increase in the number of employment related queries especially concerning termination rights of both the employer an employee. In this article we look at employees’ rights in the event of termination in Bahrain mainly under Law No.36 of 2012, the “Labour Law".
Compensation and notice period
An employer can terminate an employee's contract of employment with or without justification, provided that he provides at least one month's notice to the employee. Compensation is payable to the employee when the termination is without cause - the calculation for such compensation would depend on certain circumstances e.g. whether the employment is for a definite term or an indefinite period. Article 111 of the Labour Law sets out the various calculations for this compensation.
An employee may receive his salary in lieu of the notice period. It should be noted that although the statutory notice period is 1 month, if there is an employment contract between the parties which states a longer notice period, then the employer is bound by that longer period in the event that the contract is terminated by the employer.
There are specific circumstances under which an employer can terminate without notice or compensation, such as where an employee has committed fraud, fails to perform his essential duties or has been convicted of a crime (article 107 of the Labour Law sets out the full list). However, before an employer can terminate due to an employee's failure to perform his duties, the employer must comply with the provisions of article 109, which states that an employee is entitled to receive notice detailing the failures in his performance, and then will have 60 days to improve. After this period, if the employee is still under-performing, the employer may terminate the contract.
Termination due to sickness
One issue which may arise for employees during the pandemic is termination due to sickness. The Labour Law states that no employer can terminate an employee's contract of employment due to sickness, unless the worker has exhausted their balance of sick or annual leave.
Termination due to downsizing
Another common issue that has arisen since the start of the pandemic is redundancy due to the total or partial closure and downsizing of businesses. The Labour Law covers this at Article 110.
Where an employer needs to make redundancies, they must notify the Ministry of Labour at least 30 days before the employees are served with their notice of termination.
In a recent significant change to the redundancy procedures, Article 110 was amended to distinguish between Bahraini and expatriate employees. It now favours Bahraini employees, as the law states that in events of redundancy, if the experience and competency of the Bahraini worker match the experience of the expatriate employee, then the employer is required, by law, to retain the Bahraini employee. If the employer terminates the Bahraini employee's employment contract, the termination will be deemed unlawful, and may entitle the employee to file a claim against the employer.
Termination due to downsizing will not be considered unlawful if (1) the procedure is complied with (2) the downsizing is for legitimate reasons, and (3) the employer has acted in good faith.
A redundant employee is still entitled to compensation, but it is half the amount that would be due if the termination was unlawful or unjustified.
Other entitlements upon termination
Employees have several other rights upon termination as follows:
1. an end of service certificate stating the date of the employment, the position, wage and other entitlements, experience, and the date of and reason for termination must be provided;
2. payment in lieu of accrued annual leave; and
3. for those employees who do not benefit from the Social Insurance Law, an end of service benefit equating to half a month's wage for the first three years of service, and one month's wage for each of the following years.
In addition to the above, Article 27 of the Act No. 19 of 2006 With Regards to the Regulation of The Labour Market Law states that expatriate workers are entitled to receive a ticket to their home country, unless they will continue to work in Bahrain.
Conclusion
In conclusion, the Labour Law provides good protection to employees in case of termination and there are very limited circumstances in which employees' contracts can be terminated without notice and compensation. In all cases, importantly, the burden of proof relating to the legitimacy of termination rests with the employer.
In cases of redundancy, the Labour Law is strict about the procedures that must be followed by employers, and employees are entitled to compensation.
Finally, the legislation sets out additional rights of employees upon termination, including the end of service certificate, the right to be paid for the accrued annual leave, a leaving indemnity for expatriate employees as well as a flight back to their home country.
