MPs approve bill requiring employers to give advance notice or pay full compensation

At a glance

• Bahrain's Parliament has approved a bill amending its labour law, which mandates employers to provide advance notice or full compensation for economic dismissals.
• The bill is now under review by the Shura Council and sets stricter conditions for terminating employment due to economic reasons.
• Employers must notify the Labour Ministry 60 days in advance and provide recent financial records to avoid full compensation.
• Bahraini workers must be retained over foreign workers with similar experience and skills unless the company is closing entirely.
• Failure to meet these conditions results in full payments under Article 111 of the labour law; meeting them reduces the payment to half.

Bahrain's Parliament has approved a bill amending its labour law, which mandates employers to provide advance notice or full compensation for economic dismissals. The bill has now moved to the Shura Council for review and aims to set stricter conditions for terminating employment due to economic reasons, such as business closures or changes in production methods.

Under the proposal, employers would be required to pay full compensation unless they notify the Labour Ministry 60 days before informing the workers of dismissal and provide recent audited financial statements or financial records covering the last three years, depending on the circumstances. In cases where both a Bahraini and a foreign worker hold the same job with similar experience and skill, the Bahraini must be retained unless the company is closing entirely. Failure to meet these conditions would result in all payments under Article 111 of the labour law being made. If the requirements are met, only half the amount would be payable.