Under Bahrain’s Labour Law for the Private Sector (Law No. 36 of 2012), an employment agreement in Bahrain is a formal agreement between employer and employee. These contracts must reflect salary, job description and working hours . Contracts must show leave and be registered at the Labour Market Regulatory Authority (LMRA).
Bahrain offers four main types of employment contracts. This includes fixed term, open-ended, expatriate, and part time. Each fulfills a particular kind of employment need. Article 23 sets out expatriate contracts. This includes visa sponsorship, relocation benefits and repatriation. These contracts protect employee rights. Employment contracts explicitly offer termination rules with notice periods and gratuity as per the law.
What Are the Legal Requirements for Employment Contracts in Bahrain?
Employment contracts in Bahrain are regulated by the Labour Law for the Private Sector (Law No. 36 of 2012) and must be in writing, and in the Arabic language. The contracts must outline employee and employer details. This includes contract summary details (job description), salary, working hours (maximum 48 hours per week), leave entitlements, and dismissal conditions. HR needs to register the contracts digitally. HR also needs to comply with(LMRA), through the Expat Management System (EMS). Penalties include fines and suspension of business activities in case of non-compliance.
What Are the Types of Employment Contracts in Bahrain?
Types of employment contracts include fixed–term, open ended, expatriate and part time. There are different legal requirements for each type to comply with and to remain fair.
According to Article 99, fixed-term contracts are for fixed periods and tend to be used for expatriates or project‐based roles. Under Article 107, open ended contracts are without expiry dates and give long term stability.
Article 23 mandates that expatriate contracts consider aspects such as relocation benefits and visa sponsorship, addressing distinctive requirements and legal considerations. Labor rights are proportional according to Part-time contracts as per Ministerial Order No. 39 of 2013.
Fixed-Term Contracts
Fixed-term contracts are for a specific period. Such a contract involves one or two years of employment period.
2 Years Employment Contract
It is very popular among expatriates and is in harmony with Bahrain’s visa rules. Because work permits are usually issued for a 2 years employment contract in Bahrain. The probation Period of the contract is usually 3 months. Either party can cancel the contract within this period with shorter notice. The contract can be renewed for a further two year term if the employer updates the LMRA registration and renews the employee’s work permit. Gratuity is paid at the conclusion of the contract depending on how long the contract runs for.
1 Year Employment Contract
Probationary roles or short term projects are generally thrown on one year contracts. These are essentially much the same terms as two years, but with a shorter commitment period. This type of contract can last up to three months. One can terminate the tenancy at any time giving the residential tenant one day notice. After the completion of the contract, the employers can renew it. Expatriate renewals must be registered with the LMRA and have to be accompanied with visa extensions.
Open-Ended (Unlimited) Contract
In Bahrain, open ended employment contracts have no date of expiry. This contract will endure as long as both the employer and employee mutually agree to continue to work. This standard employment contract Bahrain is ideal for Bahraini nationals. These are also beneficial for employees who need stability in long-term roles. However, the Labour Law in Bahrain has clearly stipulated ‘amount of notice’, ‘termination’ and ‘employee rights’ regarding this type contract. Either party may be required to provide at least 30 days written notice before termination. Dismissal that is unfair requires the employer to give severance pay.
Employers can not terminate employees randomly. Article 113 of the Labour Law specifies valid grounds for termination. These include misconduct or underperformance. In addition, failure to comply with company rules can result in legal penalties. Employees get gratuity for total years of service. These are the employees who are not included by the Social Insurance Organization (SIO).
Expatriate Employment Contract
Expatriate Employment Contract includes relocation requirements, visa sponsorship and cultural adaptation. Such contracts come under LMRA and Expat Management System rules. Special provisions applicable to expatriates:
- Relocation Benefits: The latter are paid by employers who must also pay for initial airfare, relocation allowances and temporary accommodation. It is especially relevant for those relocating to Bahrain in the first place.
- Visa Sponsorship: As per law, employers need to sponsor for work visas with fees, renewals and residence permit of expatriate employees. The employer has to make sure the work permit fits the duration of the contract, usually one or two years long.
- Repatriation: Article 23 of the Labour Law obliges the employer to cover the costs of the one way repatriation to the employee’s home country upon contract termination.
- Exceptions: The employee may bear repatriation costs if the expatriate voluntarily resigns or breaches the contract.
- Cultural Adjustments: Religious and cultural accommodations are often part of contracts.
Part-Time Contract
The legislation applicable to part time contracts is the Labour Law and the Ministerial Order No. 39 of 2013. It regulates legal conditions of non standard working hours. These contracts permit workers to restrict their working hours to less than the standard 48-hour workweek. This type of employment contract is cheaper and less burdensome for employers, who can avoid the cost and blood meal of full benefits for full time work. Part time work is a source of flexibility for employees to manage family, educational and personal responsibilities. Legal considerations for part-time contracts are:
- Pro-Rated Rights: The right to basic labor rights, including leave, overtime pay and gratuity for part time employees is provided on a proportional basis, depending on the working hours of the latter.
- Wage and Hour Specifications: The working hours, hourly wage and method of payment are required to be stated in a contract.
- LMRA Registration: The LMRA registers all part time contracts just like it does full time contracts. The LMRA record must be updated by the employer. This is also applicable when the employee is communicated as moving to full time or to a different role.
- Social Insurance: For part time employees, the burden of employers to contribute to the Social Insurance Organization (SIO) is provided for only if their income is exceeding SIO thresholds.
LMRA Employment Contract Template for Bahrain
LMRA offers an online form for employment contracts that employers can use. Bahrain employment contract template entails employment duties, pay, working hours, leave entitlements and termination conditions. The LMRA employment contract template establishes private sector Law No. 36 of 2012 for employment contracts. It supplies a model of employment contracts in Bahrain.
These templates are used by the employers through the LMRA Expat Management System (EMS) on the LMRA website. The system allows you to download, modify or submit contracts digitally. For the local or expatriate staff whose main language is English, Arabic-English templates can be used.
How to Create an Employment Contract in Bahrain?
One can get the employment contract template provided by LMRA from the EMS site. Add necessary information to that template like employee ID, pay, perks, and conditions. The contract complies with labor regulations governing expatriate sponsorship and repatriation. Employers can submit a filled contract to the LMRA site for approval meeting all legal requirements.
What Are the Rules for Contract Termination and Resignation in Bahrain?
The Labour Law for the Private Sector (Law No. 36 of 2012), governs the rules for contract termination and resignation in Bahrain. Both fixed term and open ended contracts are subject to these rules.
Termination of Contract by Employer
Under certain conditions, a contract might be dissolved by the employer. For example, in cases of misconduct, breach of contract, an employee’s inability to fulfill his duties. An employer can’t terminate an employee without a valid reason. Employer has to pay compensation if terminated without reasons. To avoid disputes, employers need to follow the right notice procedures and documents. These must attach why a worker is terminated.
Resignation Before Contract Ends
If employees resign before contract in Bahrain, they need to show the reasons for resignation. Fixed term contract workers must reimburse the employer for the remaining period. This is required if they depart without reason according to Article 99 of the Private Sector Labour Law (Law No. 36 of 2012). If one resigns for unsafe working conditions or is underpaid, they are entitled to get compensation. During probation, 3 to 6 months (noted otherwise), any party can quit the contract one day ahead. Article 23, provided that employers need to bear repatriation fees. It is compulsory unless an employee performs a wrongful resignation.
How to Revise the Current Employment Contract in Bahrain?
Employment contracts must adhere to the provisions of Bahrain’s Labor Law No. 36 of 2012. Both parties need to agree to amendments to a contract. Through the LMRA Expat Management System, amendments have to be submitted by employers for approval.
What Is the Difference Between Offer Letter and Employment Contract?
An offer letter tells you the preliminary terms of a job (salary, position). On the other hand, employment contract is a legally binding agreement outlining the more detailed terms of how an employee will work for a company.
Final Words
According to the Labour Law for the Private Sector (Law No. 36 of 2012), employment contracts in Bahrain are intended to guarantee fair treatment, transparency, and compliance with the labour laws. The LMRA offers digital employment contract templates through online systems. This simplifies contract process, submission and compliance. There are different rules for the various types of employment contracts in Bahrain. And contractors are terminated for different reasons. Employment Contract makes the environment between labor and employers become professional and balanced.
