Q&A: Hassan Radhi & Associates

1. Can you provide an overview of the current employment law landscape in Bahrain, highlighting any recent legislative changes or notable court cases?

The current employment law landscape in Bahrain is predominantly governed by the Labour Law. It is important to note that there have been no recent legislative changes to this law as of the current date.

However, there has been a significant decision issued by the Committee of Unifying the Judicial Principles. This decision pertains to the principle of calculating interest for labour entitlements. According to the new principle, wages are subject to the interest stipulated by the Labour Law. However, other entitlements, such as indemnity, are subject to the principles of the Law of Commerce in terms of the calculation of interest. This has implications for both employers and employees in terms of financial planning and obligations.

2. What are the most common employment disputes or legal issues that employees and employers face in Bahrain today?

In Bahrain, one of the most commonly encountered employment disputes revolves around the determination of the legitimacy of an employee’s dismissal. The courts have a broad discretion to review the reasons for terminating employment contracts and to ascertain whether these reasons were justified or not. This often leads to legal disputes as employees may contest the grounds on which their employment was terminated, while employers need to ensure they have solid, legal justifications for any dismissal.

3. Are there any emerging trends or challenges in the labour market or employment law that you have observed in Bahrain recently?

As of the current date, there have not been any significant emerging trends or challenges observed in the labour market or employment law in Bahrain.

4. Can you share any case studies or examples of interesting or unique employment law cases you’ve handled or encountered in Bahrain?

One of the examples that are interesting in Bahrain is the case of the foreign workers working without work permits, in one of the cases that reached the Court of Cassation, the case centred around a dispute over unpaid wages and benefits claimed by a foreign worker against his former employer. There was disagreement between the two parties on issues such as the duration of employment, monthly salary amount, and calculation of end of service indemnity and annual leave pay owed.

The Court of Cassation examined the evidence presented, including documents like the work permit and contract, as well as witness testimonies where salaries differed. A significant finding was that the period of employment prior to February 2017, when the work permit was issued, was deemed illegal under Bahraini labour laws since work without a valid permit is prohibited. As a result, the Court ruled that any employment contract from the earlier period was void and unenforceable.

This employment case highlights the approach of Bahraini courts in invalidating any illegal work arrangements that do not comply with permit requirements.

5. How has the Covid-19 pandemic impacted employment law and workplace practices in Bahrain, and what legal changes or adaptations have been necessary?

The Covid-19 pandemic has indeed had a noticeable impact on workplace practices in Bahrain, though largely confined to the period of active viral spread. During this time, a significant shift towards ‘work-from-home’ practices were observed as employers adapted to the public health crisis. However, as the situation improved and normalcy gradually returned, most employers have reverted to traditional workplace settings.

The transition to remote work did give rise to some legal issues, particularly around the determination of actual working hours for employees working from home. Given the difficulty in monitoring and proving the exact hours worked remotely, disputes arose regarding these matters. However, these cases were relatively few and did not lead to amendments in the law or the establishment of new principles in court judgments.

6. What are some key considerations for multinational companies operating in Bahrain regarding labour and employment law compliance?

For multinational companies operating in Bahrain, one key consideration involves the use of employment contracts. It’s not uncommon for multinational companies to maintain standardised contracts for their global operations while also creating a secondary, localised contract to meet specific legal requirements in Bahrain.

However, this practice can lead to discrepancies between the two contracts and has been the source of numerous legal disputes in the past. It’s therefore strongly recommended that multinational companies avoid this dual contract approach. Instead, they should aim to develop a single, comprehensive employment contract that satisfies both their internal standards and the legal requirements of Bahrain.

By doing so, companies can minimise potential misunderstandings and disputes, ensuring smoother operations and better employee relations in the Bahraini market.

7. Are there any noteworthy differences or nuances in Bahrain’s employment law compared to neighbouring countries in the Gulf region?

Unfortunately our review is limited to the Bahraini law only. However, an important aspect of Bahraini law is that it provides several mechanisms for amicable resolution of employment disputes. This process begins at the Ministry of Labour, advances to the case management stage with the case manager that will propose the settlement of the claim, and only proceeds to court if these preliminary steps do not result in a resolution.

This structured approach helps in de-escalating potential conflicts and encourages settlements outside court.

8. Can you discuss the role of alternative dispute resolution methods, such as mediation and arbitration, in employment law cases in Bahrain?

Building on the previous point, Bahrain’s employment law does emphasise alternative dispute resolution methods prior to resorting to formal court proceedings. The law encourages parties to make use of mediation avenues, facilitated initially by the Ministry of Labour and subsequently by the labour case manager.
These preliminary stages provide ample opportunity for parties to resolve their disputes amicably without needing to escalate matters to the court.

9. How do you see the future of employment law evolving in Bahrain, especially in light of economic and social developments in the region?

Observing the current trends in Bahrain, especially the recent demographic shifts among employers and the growing influx of foreign investors, we foresee a potential evolution in the country’s employment law. As Bahrain continues to position itself as an attractive destination for international business, its employment laws may be revised to align more closely with global standards and trends.

This would ensure that the labour market remains competitive and adaptable, catering to a diverse range of businesses and employees. These prospective changes are not only anticipated to boost economic activity, but also to foster a modern work environment in line with international best practices.