MPs to debate bill linking layoff compensation to advance notice

TDT | Manama

Email: mail@newsofbahrain.com

Parliament is set to debate a proposal on Tuesday that would compel employers to pay full compensation to workers dismissed on economic grounds unless they notify the Labour Ministry at least two months in advance and submit audited financial reports.

The proposed amendment to Bahrain’s Labour Law (Law No. 36 of 2012) aims to tighten procedures for dismissals related to company closures, downsizing, or production system changes that reduce the need for staff. Under the new bill, employers must formally notify the ministry 60 days before informing affected employees. The notice must include financial statements covering either the past three years or the most recent audited accounts, depending on the case.

The draft also stipulates that if a Bahraini and a foreign employee hold the same position with equal qualifications and experience, the Bahraini must be retained, except in cases of full business closure. Employers who fail to comply with these requirements — or who submit false information — would be obligated to pay full compensation under Article 111 of the Labour Law. Currently, only half the amount is payable if proper procedures are followed.

The Services Committee has recommended removing a proposed new article requiring the Labour Ministry to create a dedicated register for such notifications, suggesting that ministerial regulations would be a more flexible solution.

Government officials have expressed concerns about the proposal, warning it could impose additional burdens on companies during periods of financial difficulty. They argued that the existing law already offers workers significant protection, including a 30-day notice period and compensation for unjust dismissals. They also noted that mandatory financial documentation would lead to added costs and delays, particularly where independent audits are required.

Furthermore, the government opposed the idea that failure to notify the ministry should automatically entitle employees to full compensation, stating that notification is a procedural formality rather than a legal precondition for dismissal.

The Bahrain Chamber of Commerce and Industry echoed these concerns, maintaining that the current law strikes an appropriate balance between the rights of workers and employers.

On the other hand, trade unions strongly backed the amendments. Both the Free Labour Union Federation and the General Federation of Bahrain Trade Unions supported the changes, citing repeated cases of misuse under the current system.

The Services Committee ultimately recommended retaining the existing 30-day notice period, influenced in part by Court of Cassation rulings that emphasized the procedural nature of the notification requirement and clarified that compensation depends on the legality of dismissal, not procedural compliance.