Employment
There are three key regulations that govern employment affairs in Bahrain.
The relationship between an employee and employer in the private sector is primarily governed by Law No. 36 of 2012 on the Labour Law for the Private Sector (as amended) (“Labour Law”), which sets out the rights and duties applicable to the employer and employee arising in the context of their employment relationship.
Law No. 19 of 2006 on the Labour Market Regulation (as amended) is the main piece of legislation governing the labour market. It primarily sets out the regulations pertaining to work permits, recruiting (manpower) agencies and employment offices.
Law No. 24 of 1976 on the Social Insurance Law (as amended) is the main piece of legislation governing social insurance contributions and state pensions for Bahraini employees.
The Labour Law generally does not distinguish between different types of employment contracts. The law broadly defines an employment contract as the agreement between an employer and employee, pursuant to which the employee undertakes to perform specific work for the employer under the latter’s management and supervision and in return for a wage.
The Labour Law provides that contracts of employment may be for an indefinite (open) or definite (fixed) period. A fixed term contract must specify a start and an end date. It may be terminable on notice, or upon the execution of a specific project, or can be renewed following the expiry of the agreed fixed term period.
The employment terms and conditions must be in writing. Any term or condition that does not conform to the Labour Law will be deemed null and void except to the extent that it is more favourable to the employee. Unlike some other GCC countries, there is no specific template for employment contracts to be followed by employers in Bahrain. However, the law provides for certain information to be included in all employment contracts, such as the name, position, length of contract, monthly salary, etc.
Employers seeking to hire expatriate employees in Bahrain would need to provide sponsorship to employees for work permit / residence visa purposes. The work permit application must be submitted on the LMRA’s web-portal.
The following documentation is required to be attached to the application:
Copy of the employee’s passport.
Employment contract between the employer and employee.
Medical report from country of origin showing that the employee is fit to work.
Employer’s latest electricity bill showing proof of address that matches the address shown in its Commercial Registration (CR).
Yes. A probationary period is permitted for a maximum of three months. During the probationary period, either the employer or the employee can terminate the contract by giving at least one day’s notice to the other party. On completion, the probationary period is counted towards an employee’s overall period of service.
There is a minimum wage for Bahraini nationals as follows:
BHD 450 for holders of university degrees.
BHD 380 for holders of diploma degrees.
BHD 300 for high school graduates and below.
Salaries are typically paid on a monthly basis. Unless the employer and employee expressly agree otherwise, the currency of the salary shall be in Bahraini Dinars (BHD).
In 2019, Bahrain introduced the Wage Protection System (“WPS”) to ensure that employers commit to the payment of their employees’ wages. The WPS obliges employers to pay the wages of employees through any means of payment provided by a bank approved by the Central Bank of Bahrain, including by way of transfer to bank accounts, pre-paid cards, and other means provided by such banks.
Public holidaysEmployees are entitled to leave with full pay on public holidays as announced by the Bahrain authorities for the private sector. Certain holidays are based on local sightings of the moon. Accordingly, the authorities provide a predictive date for the holiday which is confirmed closer to the time.
Annual leaveEmployees are entitled to a minimum of 30 calendar days' annual leave where the employee spends at least one year in service. Where the employee spends less than one year in service, s/he shall be entitled to leave corresponding to the period of his work (calculated with an average of two and a half day for each month).
Sick leaveThe Labour Law entitles employees who have completed three (3) consecutive months in the employer’s service, a right to paid sick leave. Employee sick leave entitlements are as follows:
Fifteen (15) days on full pay.
Twenty (20) days on half pay.
Twenty (20) days without pay.
The employee’s sickness and entitlement to a sick leave must be evidenced by virtue of a certificate issued by any of the Government Medical Centres or any of the clinics retained by the employer.
Parental leaveFemale employees are entitled to a total of 60 days maternity leave on full pay and an additional 15 days unpaid. Furthermore, female employees are entitled to take unpaid leave for a maximum period of six months to take care of their child aged up to six years old. This leave may be taken on three separate occasions during the course of their employment. Male employees are entitled to a one (1) day leave entitlement for the birth of his child.
Bereavement leaveAn employee is entitled to a three (3) day paid leave for the death of his/her spouse or any of his/her relatives to the fourth degree of kin. In addition, an employee is entitled to a three-day paid leave for the death of his/her spouse’s relatives to the second degree of kin. Additionally, a Muslim female employee, she shall be entitled to one-month paid leave in the event of the death of her spouse; and is entitled to an Idda (bereavement) period of three-months and ten-days, to be taken from the employee’s annual leave and/or unpaid leave. Furthermore, an employee is entitled to a three-day leave for the death of his/her spouse’s relatives to the second degree of kin.
Study leaveEmployees are not entitled to study leave under the Labour Law.
Pilgrimage leaveMuslim employee who has completed at least five (5) consecutive years of employment are entitled to fourteen (14) days full paid leave in order to perform Hajj. Hajj leave may only be taken once during the employee’s period of employment with the employer, provided the employee has not benefited from this entitlement during service for another employer.
The maximum working hours for employees is eight (8) hours per day, accumulating to a total of forty-eight (48) hours per week. Any additional working hours may deemed as overtime hours.
An employee shall have the choice of being paid his normal wage and an overtime payment equivalent to 150% of the employee’s wage or be given another day off in lieu. An employee cannot be required to work on his/her weekly day of rest on more than two consecutive occasions without the employee’s written consent.
An employee is entitled to payment for overtime at the rate of the employee’s normal wage plus a minimum of 25% for hours worked during the day and the normal wage plus a minimum of 50% for hours worked during the night; which occur from 7pm in the evening until 7am in the morning.
Yes. Expatriate employees are entitled to an air ticket (or to get reimbursed for such ticket) to their home country at the end of their employment. This obligation is imposed on the last employer to whom the work permit was issued.
Summary Dismissal An employer may terminate the contract of employment without notice or compensation in any of the following instances:
If an employee assumes a false identity or has provided fake certificates, qualifications or recommendations.
If an employee commits a major error resulting in serious material loss to the employer provided that the employer reports the incident to the related authorities within two (2) work days from the date of his knowledge of such loss.
In case of non-compliance by the employee with the safety instructions related to employees or the organisation and after receiving a written warning, provided that such instructions are clearly written and posted in the workplace.
The employee is absent without a legitimate reason for a period exceeding twenty (20) intermittent days or ten (10) consecutive days in one (1) year, provided that termination shall be preceded by a written notice from the employer to the employee ten (10) days from the employee's absence in the first case and five (5) days in the second.
If an employee fails to perform their essential obligations under the employment contract.
If an employee – without a written permission from the employer – discloses confidential information related to the employer.
If a final ruling is issued against the employee for a crime or misdemeanour involving dishonour, dishonesty or public morals.
If an employee is found to be under the influence of alcohol or drugs during the working hours or commits an immoral act at the workplace.
If an employee assaults the employer, the direct manager, another employee or a client during or as a result of their employment.
If an employee does not comply with legal rules concerning authorised strike action.
If an employee becomes unqualified for employment during their contract for a personal reason such as a cancellation of the employee’s license or permit to perform work.
Unlimited Term ContractIf the contract of employment is for an unlimited term, both the employer and the employee may terminate it by providing thirty days’ prior notice in writing.
If the employer or the employee fails to give the required period of notice (other than instances of summary dismissal) the party in breach will be liable to pay the other compensation in lieu of notice. This holds true even where such failure has caused no loss to the other party. Compensation in lieu of notice is calculated as the amount equal to the employee’s basic wage for the notice period in full (or in proportion to the diminished part some notice has been provided).
Termination of an employee’s service may be considered arbitrary if the reason for dismissal given by the employer does not relate to the employee’s performance, but is based on any of the following reasons:
Gender, colour, religion, ideology, marital status, family responsibilities and, in the case of a female employee her pregnancy, birth of breastfeeding.
Membership of a trade union or legitimate participation in its activities in accordance with the law.
If the employee is representing, or has or seeks to represent employees in a trade union.
If the employee files a complaint, report or lawsuit against the employer unless the report or the lawsuit is malicious.
If the employee exercises his right to take leave under the Labour Law.
The placement of an attachment on the employee’s entitlements held by the employer.
Fixed Term ContractIn the event that an employer terminates a fixed term contract prior to the expiry of the fixed term, it may be liable to pay the employee early termination compensation equivalent to the remainder of the contract period, unless the parties agree to a lesser compensation sum; which must not be less than the lower of three months’ wages or the remaining period of the contract.
Employees who have been employed for at least three (3) months will (subject to certain exceptions) be entitled to end of service benefits payable to the employee upon the termination or expiry of the employee’s employment as follows:-
Half of one month’s wages for each year of service for the first three (3) years (pro-rated for fractions of years); and
One month’s wages for each year of service beyond three (3) years of service (pro-rated for fractions of years).
Employers are obligated to register all employees with the Social Insurance Organisation. Employers need to make monthly contributions for the payment of their expatriate employees end of service gratuity. In addition, they must also collect social insurance contributions from local employees and make contributions on their behalf on a monthly basis. Contributions are calculated on a percentage of an employee’s basic salary and fixed recurring allowances. Contributions differ for Bahraini nationals and foreign national employees with contributions for the former being greater due to the requirement for the employer and employee to make contributions to the pensions fund.
There are certain nationalisation requirements applicable in Bahrain relating to the employment of Bahraini citizens, generally referred to as ‘Bahrainisation’. Specifically, employers in Bahrain are required to comply with certain quotas which determine the percentage of the employer’s workforce that must comprise Bahraini citizens. These Bahrainisation quotas are also set (and periodically updated) by the LMRA, calculated with reference to the size of the employer (its total number of employees) and the commercial activities appearing on the employer’s Commercial Registration (CR). Employers who do not meet the necessary Bahrainisation quotas are required to pay higher government fees for renewing the work visas/permits of existing employees, or for the issuance of new work visas/permits for new employees.
For the purposes of the LMRA Bahrainisation calculations, GCC nationals do not qualify as expatriate and are in effect treated as Bahrainis – this includes for Bahrainisation purposes.
