Lawmaker Proposes Law to Reform End-of-Service Benefits for Foreign Workers in Bahrain's Private Sector

TDT | Manama
Email : editor@newsofbahrain.com

MP Mohammed Al Maarifi has proposed an amendment to the private sector labor law to redefine end-of-service benefits for foreign workers. The proposal suggests determining gratuity through a written agreement between the foreign worker and employer, included within the employment contract.

This amendment targets Article 116 of the labor law. The proposed revision stipulates: "Employees not covered by the Social Insurance Law will be entitled to a mutually agreed-upon end-of-service gratuity, clearly outlined in the employment contract.

In the absence of an agreement, the worker will receive a gratuity equivalent to half a month's salary for each of the first three years of service and a full month's salary for each subsequent year. Partial years of service will be compensated proportionally."

In the accompanying memorandum, MP Al Maarifi explained that the amendment aims to provide greater flexibility for both parties. "Negotiation allows consideration of job specifics and the contractual relationship.

It also seeks to alleviate the financial burden on employers, particularly in sectors employing many foreign workers not covered by the Social Insurance Law—sectors currently facing significant financial strain under the existing law," the accompanying memorandum stated.

Al Maarifi further argued in the memorandum that the proposal would encourage the establishment of small and medium enterprises (SMEs), startups, and small companies that may struggle with current gratuity costs. This amendment, he believes, could stimulate investment.

The MP stressed that the proposal does not diminish workers' rights to end-of-service benefits. The employment contract may include alternative benefits, such as travel and housing allowances, in lieu of a standard gratuity calculation.

Furthermore, workers demonstrating exceptional skills and performance can negotiate enhanced end-of-service benefits when renewing contracts or seeking new employment.