There are many companies in Bahrain laying off employees partly because of the current global economic crisis, partly because of their bad and unprofessional management and partly because they just seek to reduce their overheads and costs.
Some companies respect the local labour law in Bahrain, some are generous and pay the end of service benefits according to the employment contracts they signed with the employees and some are trying to escape from their responsibility as employers by not paying the salaries, leave pay and EOS benefits.
The redundancies in Bahrain should be discussed and brought up to the public attention. As all other GCC countries, Bahrain is for the first time in its recent history experiencing such a high number of job losses. The HR managers and professionals, legal advisors and the official department heads of the Ministry of Labour have recently been reviewing applicable laws, regulations, policies, processes and provisions applicable to redundancies.
Today there is only the Bahrain Labour Law, in force since 1976, regulating employment contracts, although the majority of international companies operating in Bahrain apply the modern international standards and conditions of employment. As there is no law with regard to the redundancy, the labour law is applicable in all disputes related to the termination of employment.
.According to the Bahrain Labour Law, an employee may only be legitimately dismissed by giving notice according to the terms specified in the employment contract or in accordance with the provisions of the Labour Law, chapter 14. Therefore a redundancy is almost always initiated by the provision of a written notice to the employee and the reason given by the employer (usually verbally only) is almost always the employee’s bad performance.
The employer’s need to cut costs and overheads initiates and drives the redundancy process and the most important for the employer in this process is how to minimize the costs of making the employee redundant.
Reputable local and international companies in Bahrain have policies in place and their HR departments are applying these policies to every one who has been terminated. These companies are treating employees with respect and are paying all the benefits (including bonus schemes and share options), leave pays and end of service benefits etc. in accordance with the employment contracts. The reputation and the future business activities are more important for them than to cut costs by not respecting the employment contract they once signed with their employees.
But there some companies which are doing everything they can in order to save money on the terminated employees. These companies use all kinds of methods to avoid payments of contractual obligations and they treat every employee different depending on his knowledge of the labour law and ability to make a complaint by reporting to the Complaints department at the Ministry of Labour. Sometimes the company reduces the leave pay, sometimes the number of working days, sometimes the company says that the employee is not entitled to any end of service benefit amount because he has not worked more than a year, or more than three years and therefore he is not entitled to receive it. All these discussions and disputes are arising after the terminated employee has left Bahrain.
Whatever the company says, we have to remember that there are some minimum statutory entitlements which, according to the Bahrain Labour Law, an employer is obliged to pay to the terminated employee. These are following: the notice period of minimum 30 days, the accrued but unutilised leave and the end of service benefit (gratuity). The employer is also obliged to repatriate the employee to his country of origin and pay for this end of service travel home.
These statutory entitlements listed above do not contain any compensation amount due to redundancy. The legislation in Bahrain does not provide for any obligation to pay compensation to the employee who has been terminated as a result of redundancy. The labour law does not contain any specific provisions which would compensate an employee due to arbitrary dismissal either. However, it happens that, if the court considers that an employee has been unfairly dismissed, the company will be obliged to pay compensation to him..
In the business friendly Bahrain many more employees will have to leave their jobs during this year and the years to come, and therefore there is a need for the legislation of the redundancy compensation.