As the unprecedented impacts from the Coronavirus (COVID-19) pandemic on businesses of all sizes and across sectors and on peoples are rapidly unfolding, Zeenat Al Mansoori & Associates is supporting its clients. We ask that you contact us with any legal concerns or queries you may have with regard to the COVID-19 pandemic.
A significant issue for business owners in the Kingdom of Bahrain is the highly anticipated Bahrain Government
initiative to support business owners and employees by paying the salaries of Bahraini nationals in the private sector for three (3) months, which is now implemented and in motion.
The Social Insurance Organization (SIO) eServices on the SIO Portal is now open for businesses in the private sector to register their IBAN and bank account information on their eAccount with the SIO within the time limit set by the SIO to process the payment of the monthly salaries of employees who are Bahraini nationals for 3 months starting this month April 2020. The SIO has published a User Manual on 1 April 2020 for the eServices eAccount, which is accessible on https://www.sio.gov.bh/attachments/SIO-CS-DOC-MANEN-005.
On 9 April 2020, Legislative Decree No. 8 of 2020 was passed after it was approved by the Council of Representatives on 31 March 2020 and the Shura Council on 5 April 2020 on an urgent basis in accordance with Article (87) of the Bahrain Constitution.
The Legislative Decree No. 8 of 2020 added a new Article numbered (3) to Article (8), sub-para. (c), of Legislative egree No. 78 of 2006 with Respect to the Insurance Against Unemployment Law as follows:
“(3) The payment of wages of Bahraini employees who are insured pursuant to the Legislative Decree No. 24 of 1976 with Respect to the Social Insurance Law for three months commencing from the month of April 2020. Up to a maximum value of the wage insured wage and subject to Para. (e) of this Article.”
In accordance therewith, the Government shall pay the salaries of employees in the private sector who are Bahraini nationals for the months April to June 2020, inclusive, up to the BHD 4,000 insured limit on the monthly salary in accordance with Article (17) (1) of the Social Insurance Law and Article (2) of Ministerial Order No. 2 of 2006.
The SIO will be paying the salaries net of the Social Insurance contributions, in accordance with the business’s SIO eAccount information as at February 2020 and will also be paying the 7% representing the employee’s share of the Social Insurance contributions. Employers shall remain responsible to pay the employer’s share of the Social Insurance contributions of 12%.
The confirmation of the calculation of the monthly Government support for the salaries of the Bahraini employees by the SIO eServices is being sent to the businesses who registered to be then processed and transferred to the business on a monthly basis.
The Legislative Decree No. 8 of 2020 has applied the limit of BHD 4,000 per month on salary payments but does not prescribe any conditions or requirements for the eligibility to receive payment, such as a prohibition on redundancies, or a prohibition on requiring nationals to take annual leave during this period, or a prohibition on any agreement to decrease hours and decrease pay in proportion therewith, etc.
Article (2) of the Legislative Decree No. 8 of 2020 does provide that the Council of Ministers and each Ministers, as appropriate, shall be responsible to implement the provisions of the Law. It is possible, therefore, that future Ministerial resolutions may be passed with respect to the implementation of this Law. Businesses must therefore ensure they do not fall foul of the Labour Law for the Private Sector during this period.
The abovementioned Legislative Decree No. 8 of 2020 is one of several Government initiatives to support businesses and peoples in the Kingdom of Bahrain. They include by way of example, with respect to employment, Resolution No. 5 of 2020 with Respect to the Waiver of Certain Labour Market Regulatory Authority Fees passed on 2 April 2020, which waives certain Labour Market Regulatory Authority (LMRA) fees in relation to the employment of foreign employees for three (3) months starting April 2020.
Our employment team of lawyers regularly advises on all aspects of the employment relationship. Please do not hesitate to contact us for any legal assistance with any employment matters relating to the COVID-19 pandemic.