The employment relationship

Country specific laws

What laws and regulations govern the employment relationship?

Iraq recently enacted Law 37/2015 (the Iraqi Labour Law), which governs employment relationships in most of Iraq. To date, no known reforms are being considered for Iraq. In the semi-autonomous Kurdistan Region (comprising the Duhok, Erbil and Sulaymaniyah provinces), Law 71/1987, as amended (the Kurdish Labour Law), applies.

In addition to the abovementioned laws, the respective government ministries may issue instructions or regulations that affect employment law. 

Who do these cover, including categories of worker?

These laws cover all aspects of employment, including:

  • the definition of ‘workers’;
  • hiring and termination;
  • health and safety;
  • leave;
  • wages;
  • collective bargaining; and
  • avenues for complaints and redress.

Both laws distinguish foreign workers from Iraqi workers, but all workers must be fully documented in order to legally work in Iraq.

Workers are further categorised as permanent or temporary, although the Iraqi Labour Law is slightly more flexible than the Kurdish Labour Law with regard to the differences between the two.

Misclassification

Are there specific rules regarding employee/contractor classification?

The Iraqi Labour Law does not distinguish between employees and contractors. The law applies to all ‘workers’, which is anyone working under the supervision of an employer in return for a wage. The law does distinguish between permanent work and work for a defined period, but there are certain requirements that must be met under the law in order to ensure that a contract for a determined period does not convert to a permanent contract.

Likewise, the Kurdish Labour Law does not distinguish between contractors and employees. The law permits temporary or seasonal work for a fixed term, but any work which is permanent in nature generally cannot be considered a fixed-term contract. This makes termination of such a contract difficult.

Contracts

Must an employment contract be in writing?

In Iraq, employment contracts may be oral or in writing. In Kurdistan, all employment contracts are legally required to be in writing.

Are any terms implied into employment contracts?

No terms are implied into employment contracts; each contract’s wording will govern the employment relationship.    

Are mandatory arbitration/dispute resolution agreements enforceable?

No – arbitration and alternative dispute resolution agreements are not enforceable with regard to employment contracts. Both the Iraqi and Kurdistan Labour Laws establish a system for hearing labour disputes via the labour courts. If the parties cannot amicably resolve an issue, it will be heard by the Iraqi labour courts.

How can employers make changes to existing employment agreements?

In both Iraq and Kurdistan any changes to an existing employment contract must generally be made via a mutual agreement between workers and employers. Employers cannot unilaterally amend employment contracts.

Foreign workers

Is a distinction drawn between local and foreign workers?

Both the Iraqi and Kurdistan Labour Laws distinguish between foreign and local workers. Employers must be mindful of this distinction during the hiring process in order to ensure that foreign workers have obtained proper documentation, such as work and residency permits. The legal definition of a ‘worker’ encompasses both local and foreign workers and the law requires employers to treat workers equally. To this extent, most rules concerning employment relationships – including with regard to sick and annual leave, working hours and termination – are the same for both foreign and Iraqi workers.   

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