1 Legal framework
1.1 Are there statutory sources of labour and employment law?
The primary instrument that governs employment in the private sector in Federal Iraq is the Labour Law (37/2015), which replaced its predecessor, Law 71/1987, in 2016.
Other sources of law include:
- the Retirement and Social Security Law (39/1971), as amended;
- the Civil Code (40/1951), as amended; and
- the Penal Code (111/1969), as amended.
In addition, governmental decrees and decisions of the Ministry of Labour and Social Affairs and customary practices further regulate employment in Iraq.
Public sector employees are regulated by the Law on Civil Servants (24/1960) and the Law on the Disciplining of State and Public-Sector Employees (12/1991).
This Q&A discusses the Labour Law as applicable in Federal Iraq, with the exclusion of the Kurdistan Region of Iraq at the time of writing (September 2019). The Labour Law has not yet entered into force in the Kurdistan Region, pending its endorsement by the local Parliament of the Kurdistan Region. In practice, it is widely believed that the rules of Law 71/1987 still apply in the Kurdistan Region although such law has been annulled by the new Labour Law.
1.2 Is there a contractual system that operates in parallel, or in addition to, the statutory sources?
The Labour Law allows for collective agreements and collective negotiations aimed at, among other things:
- encouraging cooperation between workers' associations and employers or their associations in an attempt to promote workers' social development;
- improving work terms and conditions;
- regulating the relationship between employers and employees; and
- settling work-related disputes.
The employer must engage in negotiating collective terms upon written request by at least one registered union representing more than 20% of the enterprise's workers who will be subject to the collective agreement.
A binding collective agreement is generally concluded following a collective negotiation period. If the negotiations do not result in an agreement between the parties, any party may resort to the relevant authorities to take the necessary measures to settle the dispute in accordance with the Labour Law.
Generally, collective agreements provide for terms and conditions governing wages and the mechanism for their determination, working hours, paid holidays, overtime pay, probation periods, disciplinary rules and sanctions, trade unions' rights and dispute settlement procedures, among other things.
1.3 Are employment contracts commonly used at all levels? If so, what types of contracts are used and how are they created? Must they be in writing must they include specific information? Are implied clauses allowed?
Employment contracts may be oral or written. Written contracts are more common, particularly for office jobs. Employment contracts may be either indefinite or fixed term in duration.
Fixed-term contracts may be entered into for up to one year, for the performance of specific work or services relating to work or projects ending on a specific or expected date. An employment contract may not be entered into for a fixed-term period if the work is continuous, unless the work requires the hiring of additional workers for specified periods and tasks. If a fixed-term employment contract is renewed more than once, it shall be considered an indefinite-term contract.
The Labour Law allows for part-time employment contracts, as long the hours to be worked each week range between 12 and 24.
The minimum terms to be included in the employment contract are as follows:
- the name of the employer and the type and address of enterprise;
- the name, date of birth, qualifications, profession, residence and nationality of the worker;
- the nature, type, duration and date of commencement of employment;
- the basic wage plus all increments or allowances and the date and place of payment; and
- the working hours.
2 Employment rights and representations
2.1 What, if any, are the rights to parental leave, at either a national or local level?
A female employee is entitled to maternity leave at full pay for at least 14 weeks per year. Subject to the employer's consent, the employee may take additional maternity leave at no pay for the duration specified in question 2.2, provided that her child is under one year of age.
The Labour Law does not grant fathers paternity leave.
Any parent (male or female) is entitled to unpaid leave for up to three days to tend to a sick child of under six years of age.
2.2 How long does it last and what benefits are given during this time?
An employee is entitled to at least 14 weeks of paid maternity leave per year. Up to eight weeks may be taken before the expected due date, subject to a medical certificate. The employee is entitled to take the remaining days of maternity leave after the delivery; the period of maternity leave taken after the delivery should be at least six weeks.
The 14 weeks of maternity leave can be extended to up to nine months, subject to a decision of the competent medical authority, in the event of a difficult childbirth, a multiple birth or pre or post-natal complications.
With the employer's consent, an employee can take unpaid maternity leave for up to one year to provide care for her child, provided that the child is under one year of age.
On completion of maternity leave, the employee should return to either the same position or an equal position with the same wage.
2.3 Are trade unions recognised and what rights do they have?
The freedom to establish and join trade unions is recognised and protected. Trade unions can play a major role in negotiating and concluding collective agreements on behalf of their members with the employer, a group of employers or one or more employers' associations.
When one or more trade unions representing more than 20% of an employer's workers submit a written request for the negotiation of a collective agreement to the employer, the employer cannot refuse such negotiations. Where there is more than one trade union, they can submit a common call for negotiations; otherwise, any union can negotiate on behalf of its members.
Trade unions can also play a role when labour disputes arise, particularly collective disputes. Among other things, trade unions can request and initiate arbitration for the settlement of a collective dispute regarding future interests, where the dispute concerns the negotiations or drafting of the first collective agreement applicable to the workers represented by such union. Alternatively, and if arbitration fails, the trade union can resort to a peaceful strike to defend the professional, economic and social interests of its members.
2.4 How are data protection rules applied in the workforce and how does this affect employees' privacy rights?
To the best of our knowledge, no laws or regulations in Iraq specifically govern privacy and personal data protection. Therefore, the processing of employees' personal data will be governed by the general rules under applicable Iraqi law, including the Iraqi Constitution of 2005, the Civil Code and the Penal Code.
In general, the Iraqi Constitution aims to protect the right to privacy and grants every individual the right to personal privacy, as long as this does not contradict the rights of others and public morals. It further stipulates that the freedom of communication and correspondence shall be guaranteed and may not be monitored, wiretapped or disclosed, except for legal and security reasons and by judicial decision.
Notwithstanding the foregoing, the Labour Law does not restrict the employer's right to monitor work progress and workers' performance of the tasks entrusted to them. This may suggest that the employer's inspection of work-related documents and information in an employee's possession could fall within the general supervisory authority of the employer conferred on it by law.
In all cases, if an employee creates work product relating to the employer's activities or business in the course of his or her employment, or uses the employer's expertise, information, devices or tools in creating work product, the rights in that work product shall be to the benefit of the employer, unless otherwise stipulated in a written agreement.
2.5 Are contingent worker arrangements specifically regulated?
The Labour Law does not specifically regulate contingent worker arrangements.
3 Employment benefits
3.1 Is there a national minimum wage that must be adhered to?
Under the Labour Law, a minimum wage may be proposed by a specific committee established within the Ministry of Labour and Social Affairs and submitted to the Council of Ministers for enactment. The minimum wage shall be determined and updated regularly, subject to economic factors.
At the time of writing, the minimum wage in Iraq is IQD 350,000 (approximately $293.29).
The employer shall be subject to a penalty of not less than twice the legally prescribed minimum wage if it violates the Labour Law's provisions governing the minimum wage. Additionally, the employer shall pay compensation to an employee corresponding to twice the difference between the wage paid to the employee and the minimum wage, in the event that the actual wage paid is less than the prescribed minimum wage.
3.2 Is there an entitlement to payment for overtime?
The Labour Law defines ‘overtime work' as any work performed:
- during daily or weekly rest periods;
- on feast days and public holidays that are officially adopted in Iraq; and
- in excess of the daily working hours.
In principle, the daily working hours may not exceed eight per day or 48 per week.
However, certain work categories are explicitly exempted from these caps, including management roles (ie, persons who hold supervisory and managerial positions), security jobs and works that require secrecy. In such cases the applicable working hours shall be determined by instructions issued by the minister of labour and social affairs.
Working hours may be extended in some cases, including the following:
- in case of accident or imminent accident, urgent repair of devices or machines or other instances of force majeure. In such cases, the increase in the number of working hours should be proportionate to the time necessary to prevent the suspension of normal activities in the enterprise; and
- if the circumstances require that work be performed in continuous consecutive shifts, provided that the total weekly working hours do not exceed 56 and the employee's right to a compensatory day of rest per week is still respected.
Working hours may also be extended by decision of the Ministry of Labour and Social Affairs, after consultation with the relevant employers and employees' associations. Such exceptions may be granted in order to:
- address exceptional workloads as a result of feast days, seasonal work or other circumstances;
- repair or maintain devices, tools and machines whose shutdown would interrupt work in the enterprise;
- prevent the deterioration of substances or products; or
- draw up the annual inventory and accounts, or prepare for the end of one season and the start of the next.
In granting such exceptions, the ministry will specify the maximum additional working hours in each case, as well as the overtime pay rates, which shall be:
- not be less than one and a half times the usual hourly wage for day work; and
- not less than twice the usual hourly wage for night work or work that is arduous or harmful.
A worker should be compensated with one rest day during the week if work is done on his or her weekly day of rest.
The total amount of daily overtime permitted depends on the nature of the work performed. For example:
- for industrial activities performed in shifts, overtime shall not be more than one hour per day, except in the following cases, where daily overtime can be extended to up to four hours:
- work of an unusual nature; or
- preparatory or complementary work for industrial activities; and
- for non-industrial activities, up to four hours.
In any case, the total amount of overtime cannot exceed 40 hours over a 90-day period or 120 hours over a 12-month period.
3.3 Is there an entitlement to annual leave? If so, what is the minimum that employees are entitled to receive?
Employees are entitled to a minimum of 21 days of annual leave on full pay after one year of service. This annual leave is increased to a minimum of 30 days for employees who undertake arduous or harmful work. Annual leave increases gradually with years of service, pursuant to the Labour Law.
Any agreement through which an employee waives his or her right to the minimum paid annual leave, whether in exchange for or without compensation, is deemed null and void.
3.4 Is there a requirement to provide sick leave? If so, what is the minimum that employees are entitled to receive?
Employees are entitled to fully paid sick leave of 30 days for every year of service, up to a total of 180 days. If a sick employee exhausts this period of sick leave without recovering, he or she shall be subject to the Social Security Law. The retirement and social security fund shall reimburse the employer for any wages paid to the insured employee for that period of sick leave exceeding 30 days per year of service.
3.5 Is there a statutory retirement age? If so, what is it?
The Labour Law does not explicitly provide for a retirement age in Iraq. The Social Security Law remains the primary legislation that governs retirement in the private sector in Iraq and applies alongside the Labour Law.
The Social Security Law indirectly determines the retirement age. Article 65 states that an employee becomes entitled to a retirement salary upon termination of employment where, among other things, the employee:
- has reached the age of 60 for men or 55 for women and has completed at least 20 years of covered service; or
- has completed at least 30 years of covered service for men or 25 years for women.
Based on the foregoing, it is commonly accepted in Iraq that the retirement age in the private sector is 60 for men and 55 for women.
4 Discrimination and harassment
4.1 What actions are classified as unlawfully discriminatory?
The Labour Law prohibits any violation of the principle of equal opportunities and equal treatment, for whatever reason, and particularly direct or indirect discrimination between employees in all matters relating to vocational training, recruitment and the terms and conditions of employment.
‘Direct discrimination' is defined as "any distinction, exclusion or preference based on race, colour, sex, religion, sect, political opinion and belief, origin or nationalism". On the other hand, indirect discrimination occurs in the event of any exclusion or preference based on nationality, age, health, economic or social conditions, affiliation to a trade union or trade union activity, which has the effect of nullifying or impairing equality of treatment in recruitment and employment.
4.2 Are there specified groups or classifications entitled to protection?
The Labour Law affords special protection to women and juveniles.
Employment of juveniles: The Labour Law protects juvenile workers (aged between 15 and 18) by regulating their employment and in some instances prohibiting their employment where this is deemed dangerous to their health, life or morals.
The Labour Law sets out a list of such prohibited work, which includes working:
- underground or underwater, at dangerous heights or in restricted areas;
- in unhealthy environments which involve exposure to hazards or unusual temperatures; or
- under difficult conditions for long hours.
Juveniles must undergo a medical examination before being employed in order to validate their physical condition and fitness for the job, and subsequently at least once a year during the term of employment.
Furthermore, the Labour Law affords certain protections to juveniles, including in relation to working time and annual leave. The Labour Law expressly prohibits the employment of juveniles of up to 16 years of age for more than seven hours a day; where their daily working hours exceed four continuous hours, they must also be given at least one hour's rest. Juveniles are entitled to annual leave of 30 days on full pay.
Employers that breach the provisions of the Labour Law relating to the employment of juveniles are criminally liable.
Employment of women: The Labour Law includes many measures aimed at protecting women in employment and compels employers who engage female employees to display on a board in the workplace a copy of the specific rules regulating the protection of women at work.
Such measures include prohibitions against:
- forcing a pregnant or a breastfeeding employee to perform any extra work:
- considered by the relevant medical authority to be unhealthy for the employee or her child; or
- considered dangerous to either of them as evidenced by a medical report; and
- employing a woman during a night shift, unless the job is necessary due to a force majeure event or for the purpose of preserving raw materials or perishable goods. This prohibition shall not apply to women working in the management, commerce, health, entertainment, transportation and telecommunication sectors.
Women are also granted a minimum daily rest period of 11 consecutive hours, which includes seven hours of rest between 9:00pm and 6:00am.
The employer shall provide:
- a resting place for female employees, according to the work's requirements; and
- a nursery, according to the minister's instructions.
4.3 What protections are employed against discrimination in the workforce?
The Labour Law does not explicitly provide for protection measures to be undertaken against discrimination in the workforce.
The general principle of non-discrimination as discussed in question 4.1 above applies to prohibit employers from conducting any acts of direct or indirect discrimination.
4.4 How is a discrimination claim processed?
An employee may file a discrimination claim with the labour court when exposed to any form of forced labour, discrimination or harassment in employment.
Moreover, enterprises and workplaces are subject to labour inspections under the supervision and direction of the Ministry of Labour and Social Affairs. The labour inspection committee must provide an appropriate mechanism for the receipt of employees' complaints in respect of any violations of their rights as set forth in the Labour Law, and inform employees of how to avail of this mechanism. The inspection committee routinely prepares reports and refers them to the ministry. The ministry will then issue a warning to the employer before deciding whether to refer the matter to the competent court.
4.5 What remedies are available?
In the event of violation of the provisions relating to discrimination, forced labour and sexual harassment, among other things, the party in breach shall be subject to imprisonment for up to six months and/or a fine of up to IQD 1 million.
Furthermore, an employer can dismiss an employee who engages on more than one occasion in conduct that is incompatible with work ethics, provided that the employer has already served the employee with a prior warning. An employee may also be dismissed if he or she is found guilty by a final court judgment of committing a misdemeanour or crime in the workplace against a colleague.
4.6 What protections and remedies are available against harassment, bullying and retaliation/victimisation?
The Labour Law prohibits sexual harassment at different levels, whether in relation to recruitment, vocational training or employment terms and conditions. The Labour Law further prohibits any other behaviour that creates a hostile, intimidating or offending work environment.
‘Sexual harassment' as referred to in the Labour Law includes any physical or verbal conduct of a sexual nature, or any other conduct based on sex, which:
- affects the dignity of a person;
- is undesirable and unreasonable;
- is insulting to the victim; and
- explicitly or implicitly results in a decision that affects the employee's job, where he or she has rejected such conduct.
The employee affected can file a complaint with the labour court; if found guilty, the perpetrator may be subject to imprisonment and/or a fine, as stated in question 4.5.
5 Dismissals and terminations
5.1 Must a valid reason be given to lawfully terminate an employment contract?
An employer may unilaterally terminate an employment contract without prior notice or severance pay in certain cases, including the following:
- The employee has contracted an illness that prohibits him or her from working and does not recover within six months, as substantiated by an official medical report;
- The employee has become at least 75% incapacitated and is unable to work, as substantiated by an official medical report;
- It becomes evident during the probation period that the employee is not sufficiently qualified to perform the work;
- The working conditions of the company call for downsizing, subject to the consent of the minister of labour and social affairs;
- The employee has assumed a false identity or submitted forged documents;
- The employee commits a breach of his or her obligations under the contract; or
- The employee is found liable through a final court judgment for a serious fault causing material damage to the work, workers or production.
Unless provided otherwise by the Labour Law, an employment contract cannot be terminated in the event of a fault committed by the employee, unless such fault has been repeated at least once following service of a written warning by the employer.
Furthermore, an employment contract cannot be terminated due to unsatisfactory performance of the employee's work, unless the employee continues performing his or her duties in an unsatisfactory manner for a period of 30 days from the date of service of a written warning by the employer with the necessary instructions.
Notwithstanding the foregoing, the termination of an employment contract should not be unfair or abusive.
5.2 Is a minimum notice period required?
Where termination notice is required, it must be served on the employee at least 30 days prior to the termination date. Otherwise, the employer will be liable to pay the employee compensation equivalent to the wages that would have been due during the notice period.
In case of termination of the contract during the probation period, the employer must serve the employee with at least seven days' notice.
5.3 What rights do employees have when arguing unfair dismissal?
An employee whose employment contract is terminated has 30 days following receipt of the termination notice to challenge this decision before:
- a special committee established on the instruction of the minister of labour and social affairs (the End of Service Committee); or
- the labour court.
If the challenge is not brought within this timeframe, the employee will be deemed to have waived his or her right to challenge the termination decision. Once the employee challenges the termination decision before one of the aforementioned bodies, he or she loses the right to challenge it before the other. However, a decision of the End of Service Committee may be challenged before the labour court within 30 days of the employee's actual or deemed receipt of such decision.
5.4 What rights, if any, are there to statutory severance pay?
In principle, an employee whose service is ended is entitled to an end of service gratuity equivalent to two weeks' pay for each year of service, except in any of the following circumstances, in which case no severance pay will be due:
- The employee is sentenced by a final court judgment to imprisonment for more than one year;
- The employee assumes a false identity or submits forged documents;
- The employee commits a breach of his or her obligations under the contract; or
- The employee commits a serious error causing material damage to the work, workers or production.
6 Employment tribunals
6.1 How are employment-related complaints dealt with?
The Labour Law provides different mechanisms for settling disputes and employment-related claims. Employers must establish an appropriate internal mechanism to deal with employee complaints. Employees can also submit complaints to relevant Iraqi labour authorities, such as the labour inspection committee (under the supervision of the Ministry of Labour and Social Affairs) or the relevant labour court.
Complaints and claims relating to dismissal may be challenged before relevant Iraqi authorities such as the End of Service Committee or the labour court. The burden of proof rests with the employer. The End of Service Committee or the labour court will decide either to reinstate the employee or to uphold the termination decision, subject to compensation pursuant to the Labour Law.
6.2 What are the procedures and timeframes for employment-related tribunals actions?
With regard to the procedures in case of a dispute arising from negotiations on a collective agreement, see question 1.2.
Either or both parties to a dispute over existing rights arising from any of the following may refer the dispute for settlement to the relevant Iraqi labour authorities:
- the provisions of the Labour Law and other applicable laws governing labour and employees;
- an applicable collective labour agreement; or
- an arbitration award.
The authorities shall issue their decision within 14 days of receipt of a written notice in this regard.
If the parties fail to reach a settlement or if any of the parties is dissatisfied with the authority's decision, the dispute may be submitted to the labour court.
The labour court shall rule on the matter within 30 days of submission of the complaint and its decision shall be binding upon the parties.
In certain cases – such as those involving forced labour, discrimination, harassment, dismissal or imposition of a penalty by the employer – the employee may directly refer the matter to the labour court.
7 Trends and predictions
7.1 How would you describe the current employment landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?
The enactment of the new Labour Law, which entered into force in Federal Iraq in 2016, marked an essential step in the attempt to align Iraqi labour practices with international norms. The Labour Law is more detailed and addresses the shortcomings of its predecessor.
As mentioned previously, the Labour Law has not entered into force in the Kurdistan Region of Iraq, pending endorsement by the local Parliament. In practice, it is widely believed that the rules of the previous Labour Law still apply in the Kurdistan Region, although such law has been annulled by the new Labour Law. A draft labour law is reportedly under consideration by the Kurdistan Parliament (envisaged to be separate from the federal Labour Law). It remains to be seen whether the Kurdistan Region will apply the new Labour Law or enact its own.
8 Tips and traps
8.1 What are your top tips for navigating the employment regime and what potential sticking points would you highlight?
As a first step, each employer should check which labour law is applicable in the relevant region. The employer should also identify any other applicable laws and regulations, including those relating to the employment of foreign workers.
The employer should further check whether any collective agreements must be considered before signing an employment contract in the relevant sector.
In determining the terms and conditions of the employment contract, the parties – and particularly the employer – should pay attention to the mandatory provisions of the law and the minimum rights granted to employees, such as working hours and termination rights.
With regard to dispute settlement, as previously discussed, the Labour Law grants the parties the right to avail of different mechanisms, depending on the nature of the dispute. When an employee challenges a termination decision before the Iraqi authorities, the burden of proof rests with the employer.
In any case, it is always recommended that the advice of local legal counsel be sought when developing internal HR regulations and drafting model employment contracts.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.