For foreign companies in Iraq, employees are often the largest ongoing commitment. Hiring, managing and dismissing staff are all governed by the Labour Law, which gives workers significant protection. Contracts drafted on foreign templates may not match Iraqi requirements. Mistakes can lead to labour claims, penalties and disputes with the authorities.
Legal Framework
The Labour Law No. 37 of 2015 governs employment relationships in the private, mixed and cooperative sectors in Iraq. It replaced the earlier Labour Law of 1987 and was designed to bring Iraqi law closer to international labour standards. It covers employment contracts, working hours, leave, wages, termination, and health and safety.
The law is administered by the Ministry of Labour and Social Affairs. It works alongside the Workers’ Retirement and Social Security Law No. 18 of 2023 and the Foreigners Residence Law No. 76 of 2017. Disputes are heard by specialised labour courts.
Key Points for Foreign Companies
Who Is Covered
The law applies to workers employed in Iraq in the private and mixed sectors, including those working for foreign companies and branches. Iraqi and foreign employees are both covered. Some categories, such as public servants, are governed by other laws.
Employment Contracts
Employment contracts should be in writing and set out the job, wage, duration and other key terms. Contracts in a foreign language should be accompanied by an Arabic version. Where the contract is unclear, the law and its protections fill the gap.
Working Hours and Leave
The law sets maximum working hours, rest periods and rules for overtime. Employees are entitled to paid annual leave, sick leave and official holidays. Female employees have specific rights, including maternity leave. Policies should be checked against the law’s minimum standards.
Wages
Wages must be paid regularly and in full. The law protects wages from unlawful deductions. Employers should keep accurate payroll records, which are also needed for tax and social security.
Equality and Prohibited Practices
The law prohibits forced labour, child labour and discrimination in employment. It also addresses sexual harassment in the workplace. Companies should reflect these rules in their internal policies and training.
Foreign Workers
Foreign employees need a work permit from the Ministry of Labour in addition to valid residence. The law aims to protect jobs for Iraqis, so permits may depend on the need for foreign skills. Companies should plan permits before staff arrive.
Termination of Employment
The law sets out when and how an employment contract can be ended. Termination must follow the grounds and procedures in the law. Employees may be entitled to notice and end-of-service payments. Dismissals that do not follow the law can be challenged before the labour courts.
Health and Safety
Employers must provide a safe working environment and protect workers from occupational hazards. This is especially important on construction, energy and industrial sites. Breaches can lead to penalties and liability for injuries.
Practical Recommendations
- Use written employment contracts with an Arabic version for all staff.
- Review working hours, leave and wage policies against the Labour Law.
- Obtain work permits and residence for foreign staff before they start work.
- Follow the legal grounds and procedures carefully before any dismissal.
- Keep complete payroll and personnel records for inspections and disputes.
Conclusion
The Labour Law gives employees in Iraq strong protections that employers cannot contract out of. Foreign companies that align their contracts and policies with the law reduce the risk of disputes and keep their workforce stable.
This article provides general information only and does not constitute legal advice. For advice on employment law in Iraq, contact Etihad Law team.