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A draft legislation aimed at tightening procedures for terminating workers due to economic reasons, including requiring employers to submit audited financial reports for the past three years when notifying the Labour Ministry of planned layoffs, and extending notice requirements before dismissals is up for debate in the Shura Council on Sunday.
The legislation also introduces a new article (110 bis) to the 2012 Private Sector Law establishing a registry for such notifications.
The chamber’s services committee has rejected proposed amendments to the law, warning that they would place “unrealistic burdens” on employers and fail to achieve their intended goals.
The committee, chaired by Dr Jameela Al Salman, said that the draft law – to amend certain provisions of the Labour Law issued by Law No (36) of 2012 – presented by Parliament “complicates procedures and burdens employers without delivering practical benefits”.
Requiring audited financial statements as a precondition for layoffs would be “extremely difficult” for many businesses to comply with, the committee noted.
It also argued that the Labour Ministry was not equipped to handle or assess such financial data.
The committee further highlighted that the proposed amendments overlook non-financial reasons for downsizing, such as technological changes, restructuring, or shifts to digital operations.
It said that making financial losses the sole justification for reducing staff “fails to reflect the realities of modern business”.
In addition, members warned that expanding the grounds for workers to receive full compensation – simply due to procedural lapses such as delayed notification – would “create legal uncertainty and discourage permanent employment”.
The committee also pointed out that the proposed changes duplicate existing protections already contained in Article (111) of the current law, which grants full compensation in cases of unlawful dismissal.
However, Bahrain’s two labour federations have backed Parliament and urged the Shura Council to reconsider.
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