Disputes With Employees Under Bahraini Labour Regulations

Disputes With Employees Under Bahraini Labour Regulations  

Introduction: Under the Labour Law, it is crucial for employers to adhere to legal frameworks when addressing disputes with employees. This article aims to provide insights into handling various employment-related conflicts, with a specific focus on termination disputes. By understanding the legal obligations and resolution mechanisms, employers can navigate disputes effectively while upholding the rights of both parties.

1. Legal Framework for Termination Procedures: Termination of employment in Bahrain must adhere to specific procedures outlined in the Labour Law. Employers must ensure compliance with statutory requirements regarding notice periods, severance pay, and other entitlements. Failure to follow these procedures may result in legal repercussions for the employer.
2. Handling Termination Scenarios:

• Termination of Service Without Cause: Employers must provide a valid reason for terminating an employee’s service. However, if termination occurs without cause, the employee may be entitled to compensation as per the Labour Law. Employers should document the reasons for termination to defend against potential disputes.
• Termination Without a Legitimate Reason: Terminating an employee without a legitimate reason can lead to disputes and legal challenges. Employers should ensure that terminations are based on valid grounds such as poor performance, misconduct, or redundancy, as defined by the Labour Law. 
  
  Pursuant to Article 106 of the Labour Law, the employee may terminate the labour contract following the employer’s notification in any of the two following events:
  • The violation by the employer of an essential obligation specified by virtue of the law, the labour contract, or the work regulations at the establishment;
  • If the employer or his representative deceives the employee as to the working conditions or circumstances, when said, deception is so serious to the extent that otherwise the labour contract would not have been concluded.

Before sending the notice of termination of the labour contract, the employee must request, in writing, the employer to remedy the violation or deception within a time limit not exceeding thirty days from the date of submittal of the request. If said time limit elapses without any response by the employer to said request, the employee shall have, after sending the abovementioned notice, the right to terminate the labour contract.

Such termination of the labour contract shall be deemed lacking a legitimate reason by the employer if the employee’s allegations are evidenced.

• Termination by Unlawful Dismissal: Arbitrary dismissal, where an employee is terminated unfairly or without due process, is prohibited under the Labour Law. Employers must provide employees with a fair opportunity to contest the termination and present their case.

 In the context of the Labour Law, specific criteria have been outlined to determine cases of arbitrary dismissal. Article 104 of the Labour Law delineates six exclusive cases that qualify as arbitrary dismissal.

These cases are as follows:

• • The employee’s sex, color, religion, ideology, marital status, family responsibilities, or the female employee’s pregnancy, delivery of a child, or breastfeeding;
  • If the employee is affiliated with any employee trade union or participates legitimately in any of its activities in accordance with the laws and by-laws;
  • If the employee represents employees in a trade union association, has already enjoyed said capacity or seeks to do so;
  • If the employee submits a complaint or formal notice or instigates an action against the employer, unless the complaint, formal notice, or action is of a vexatious nature;
  • If the employee exercises his right to take a leave in accordance with the provisions of the Labour Law;
  • The garnishment of the employee’s entitlements with the employer.

The important question often posed is whether there is any difference regarding the compensation granted in the case of termination of service without cause or without a legitimate reason in the case of unlawful dismissal.

The answer has been clarified in Article No. 111 of the Labour Law as follows:

1. 1. If the employer terminates the indefinite-term employment contract within the first three months from the date of commencement of work, the employee is not entitled to any compensation unless the termination constitutes arbitrary dismissal pursuant to the provisions of Articles 104 and 105 of the Labour Law. In this case, the employee is entitled to compensation equivalent to one month’s salary.
   2. If the employer terminates the indefinite-term employment contract without cause or for unjustifiable reasons after the expiration of three months from the date of commencement of work, he shall compensate the employee with an amount equivalent to two days’ salary for each month of service, not less than one month’s salary and not exceeding twelve months’ salary.
   3. If the employer terminates the fixed-term employment contract without cause or for unjustifiable reasons, he shall compensate the employee with an amount equivalent to the salary for the remaining duration of the contract, unless the parties agree on a lesser compensation, provided that the agreed compensation does not amount to less than three months’ salary or the remaining duration of the contract, whichever is less.
   4. If the employer terminates the contract concluded for the completion of a specific task without cause or for unjustifiable reasons, he shall compensate the employee with an amount equivalent to the salary for the remaining and necessary period to complete the agreed-upon task, according to the nature of the work, unless the parties agree on a lesser compensation, provided that the agreed compensation does not amount to less than three months’ salary or the remaining and necessary period to complete the work, whichever is less.
   5. In the cases stipulated in paragraphs (A) and (B) above, if the termination of the contract constitutes arbitrary dismissal pursuant to the provisions of either Article 104 or 105 of the Labour Law, the employee shall be entitled to additional compensation equivalent to half of the compensation due pursuant to the provisions of above, unless the contract provides for compensation exceeding that.
   6. For the purposes of the above calculations, fractional months shall be considered as complete months

3. Subsequent Disputes Over Labour Entitlements: Disputes may arise regarding labour entitlements post-dismissal, including severance pay, end-of-service benefits, and outstanding dues. Employers should maintain clear records of employment contracts, salary payments, and any agreements related to entitlements to resolve such disputes efficiently.

 Further to Article 110 of the Labour Law:

The employer may terminate the labour contract as a result of the total or partial closure of the establishment, the downsizing of its activities, the replacement of the production system by another in a way that affects the number of the workforce, provided the contract is only terminated following the notification of the Ministry of Labour of the reason of termination thirty days before the date of notification of the employee of the termination.

The employee shall be entitled in case of termination of the labour contract for any of the reasons specified in the previous paragraph to compensation equivalent to half the compensation specified in Article 111 of the Labour Law.

Article 47 of the Labour Law:

The employee’s rights related to the end of service indemnity and the compensation for the annual leave balance specified in Article 59 as well as the compensation due in accordance with the provisions of Article 99(b) and Article 111 of the Labour Law, shall be calculated on the basis of the last basic wage of the employee in addition to the social gratuity if any. If the employee is employed by piecework or per production or receives a fixed wage plus a commission or percentage, the average wage of the employee during the last three months shall be retained in the calculation of these rights.

4. Resolution Mechanisms: Employers and employees can resolve disputes through various mechanisms, including mediation, arbitration, or litigation. These mechanisms offer alternative avenues for resolving conflicts outside of the formal court system, promoting faster and more cost-effective solutions.

• • Arbitration: Pursuant to Article 119 of the Labour Law, the Authority for Settlement of Individual Labour Disputes (the “Authority”) was formed to be in charge of the amicable settlement of any individual labour dispute submitted to it between the employee and the employer with the approval of both parties before resorting to the judiciary.

If the dispute is settled, the Authority shall draft minutes to be signed by the parties to the dispute or their representatives and the competent civil-servant, and such minutes shall have the power of an executive bond.

In accordance with the provisions of Chapter Fourteen of the Labour Law concerning collective labour relations, requests for collective labour disputes are forwarded to the Trade Union Affairs Department of the Ministry of Labour by employee groups or union organizations, who are then encouraged to mediate the issues amicably before filing a formal complaint  to the Ministry of Justice, Islamic Affairs, and Endowments’ Collective Arbitration Panel or the Collective Labour Disputes Settlement Council.

• • Litigation: Labour disputes are initially brought before the Labour Lawsuit Department of the Ministry of Labour as a requisite preliminary step prior to formal litigation. In the event that an amicable resolution proves elusive, the matter is subsequently escalated to the esteemed jurisdiction of the High Labour Court for adjudication.

The labour action shall be subject to the statute of limitation of the expiry of one year from the date of expiry of the labour contract.

Pursuant to Article 136 of the Labour Law. The above statute of limitation shall not apply to actions related to the infringement of commercial or industrial secrets or the implementation of the provisions of the labour contract aiming at ensuring the observance of these secrets.

In conclusion: As outlined in this article, strict adherence to the Labour Law’s provisions ensures that employers fulfill their legal obligations while safeguarding the rights of both parties involved. By embracing mediation, arbitration, or litigation as viable avenues for dispute resolution, employers can foster equitable and efficient mechanisms for addressing conflicts, thereby promoting a harmonious and legally compliant work environment. This proactive approach not only mitigates legal risks but also upholds the principles of fairness and justice in the employer-employee relationship, ultimately contributing to the overall stability and prosperity of businesses operating in Bahrain.