Country snapshot

Key considerations

Which issues would you most highlight to someone new to your country?

In Iraq, different labour laws apply depending on where a company is located. Law 37/2015 (the Iraqi Labour Law) governs employment relationships in most of the country. However, in the semi-autonomous Kurdistan Region (comprising the Duhok, Erbil and Sulaymaniyah provinces), Law 71/1987, as amended (the Kurdish Labour Law), remains in force. (Kurdistan recently began applying the 2015 Iraqi Labour Law, but the Kurdish Parliament has yet to legally adopt it.)

In addition, instructions and regulations issued by the respective ministries clarify, expand or otherwise amend the two labour laws. These instructions and regulations are not always published or made available to the general public without enquiring at the ministries.

Foreign workers must obtain a work and residency permit before they can work. The procedures for obtaining these documents can be cumbersome and time consuming. However, this documentation is essential if the workers are to be legal.    

What do you consider unique to those doing business in your country?

The current political climate and security risks may make doing business difficult, but this does not mean that businesses cannot operate successfully and in full compliance with the law. Businesses must possess an understanding of the applicable processes, both legal and cultural, and be dedicated to achieving their goals.

Is there any general advice you would give in the employment area?

Anyone hiring workers in Iraq, whether foreign or domestic, should consult local counsel for a full understanding of the relevant employment laws. All workers should be properly documented. In addition, the scope of the entity and any potential work should be considered before hiring, due to the difficult nature of terminating employment contracts.

Further, although enforcement mechanisms may not be prompt or efficient, all companies should abide by the labour laws, even if it appears that there will be no immediate repercussions for a lack of compliance. It takes only one disgruntled employee to file a complaint for an investigation to be launched. In some cases, especially if the employee is an Iraqi citizen, the investigation may be thorough and uncover other instances of illegal activity, resulting in penalties such as fines or the imprisonment of executives.

Emerging issues/hot topics/proposals for reform

Are there any noteworthy proposals for reform in your jurisdiction?

Iraq recently enacted the Iraqi Labour Law, which governs employment relationships in most of the country. To date, no known reforms are being considered for Iraq.  

In the semi-autonomous Kurdistan Region, the Kurdish Labour Law remains in force. Kurdistan recently started applying the Iraqi Labour Law, but the Kurdistan Parliament has yet to legally ratify it.

What are the emerging trends in employment law in your jurisdiction?

The Iraqi Labour Law attempts to align Iraqi labour practices with international norms. While the revised law has expanded employer rights, it remains highly protective of workers.

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.   

Recruitment

Advertising

What are the requirements relating to advertising positions?

Both Law 37/2015 (the Iraqi Labour Law, which governs employment relationships in most of Iraq) and Law 71/1987 (the Kurdish Labour Law, which governs employment relationships in the semi-autonomous Kurdistan Region (comprising the Duhok, Erbil and Sulaymaniyah provinces)) establish a system for hiring workers.

Prospective employers must notify their local employment office of a vacancy. If the employment office does not locates a viable candidate, the employer may directly hire any individual. Employers may publicly advertise a position in Iraq only after engaging the employment office and receiving a negative or no response.

Background checks

What can employers do with regard to background checks and inquiries in relation to the following:

(a) Criminal records?

Employers may review workers’ or potential workers’ criminal records if their request to do so is explicit and agreed in the employment contract or pre-employment agreement. The law requires security companies to:

  • review a potential worker’s criminal record before hiring them; and
  • file a copy of this document with the Ministry of Interior.

(b) Medical history?

In general, nothing prohibits employers from requesting workers’ or potential workers’ medical history.     

(c) Drug screening?

Employee drug use is governed by the Iraqi and Kurdistan Labour Laws only to the extent that it affects workers while they are in the workplace. However, if drug screening is written into an employment or pre-employment agreement, once signed, the worker must abide by it.      

(d) Credit checks?

Neither the Iraqi nor the Kurdish Labour Laws require employers to conduct credit checks on potential employees. In practice, it is unlikely that banks in Iraq will permit a credit check on an individual.

(e) Immigration status?

Both the Iraqi and Kurdish Labour Laws require workers to have the proper documentation, including a work permit, in order to work. Therefore, enquiring about a potential worker’s proof of immigration should be viewed as complying with the law.

(f) Social media?

It is uncommon for employers or potential employers to check the social media accounts of workers or potential workers. However, to the extent that this information is public, there should be no limitation on reviewing it. Employers cannot force workers to divulge their social media passwords.

(g) Other?

Not applicable.

Wages and working time

Pay

Is there a national minimum wage and, if so, what is it?

Both Law 37/2015 (the Iraqi Labour Law, which governs employment relationships in most of Iraq) and Law 71/1987 (the Kurdish Labour Law, which governs employment relationships in the semi-autonomous Kurdistan Region (comprising the Duhok, Erbil and Sulaymaniyah provinces)) call for the Ministry of Labour and Social Affairs to establish a minimum wage. At present, the minimum wage is ID250,000 (approximately $200) per month. However, the ministry can change this amount depending on the situation in the local market.

Are there restrictions on working hours?

Both Iraq and Kurdistan have strict restrictions on working hours, although the laws do provide for limited overtime. Both laws establish a cap of eight working hours per day and 48 hours per week, subject to overtime. There are additional limitations for certain types of work, such as work that is:

  • performed at night;
  • considered to be arduous; or
  • dangerous or hazardous to health.

There are also limited exceptions for certain roles, such as watchkeepers and supervisors.

Overtime is strictly regulated. In general, no more than one to four hours per day may be worked as overtime, depending on the type of work. Further, in Iraq, overtime is capped at 40 hours per 90 days and 120 hours per 12 months.

Hours and overtime

What are the requirements for meal and rest breaks?

Both the Iraqi and Kurdish Labour Laws require that:

  • workers receive a break of between 30 to 60 minutes per day; and
  • no worker be engaged in work for longer than five consecutive hours.

How should overtime be calculated?

Both the Iraqi and Kurdish Labour Laws strictly regulate overtime. For work performed during the day, the overtime pay rate is 50%. For work performed at night, this rate is doubled.

What exemptions are there from overtime?

In Iraq exceptions to the limitations on working hours are granted for certain types of occupation. For example, the law exempts the following workers from the restrictions on working hours:

  • supervisors and managers;
  • persons in a position which requires confidentiality;
  • workers who perform preparatory or complementary work outside their regular working hours;
  • watchkeepers;
  • agricultural workers; and
  • persons assigned to perform work outside the workplace.

Kurdistan limits these exemptions to working hours to:

  • domestic workers;
  • agricultural workers;
  • watchkeepers; and
  • persons who perform preparatory or complementary work outside their regular working hours. 

In Iraq, limited exemptions to overtime are also available when additional work is needed to prevent or remedy an accident or when a role requires consecutive shifts. However, this shift work cannot exceed 56 hours per week and the worker is entitled to their weekly day of rest.

In Kurdistan, exemptions are provided for accident prevention or remedy and other cases of urgency or force majeure.

In Iraq workers may – in exceptional cases – agree with their employer to exceed the overtime limits for a certain period, provided that the average number of hours worked per week during this time does not exceed 48 hours.

In both Iraq and Kurdistan, exemptions to overtime may be granted for:

  • seasonal work;
  • essential mechanical maintenance;
  • product preservation; and
  • work relating to the beginning or end of the year, such as an annual inventory.

In Iraq the above exemptions require ministerial approval.  

Is there a minimum paid holiday entitlement?

In Iraq, workers are entitled to full pay for feast days and official holidays that do not fall on a Saturday. Further, after one year’s service, workers are entitled to 21 days’ fully paid annual leave. This amount of leave increases incrementally according to labour law.

In Kurdistan, workers are entitled to paid leave on official holidays and 20 days’ annual leave per year, with subsequent increases as established by law.

What are the rules applicable to final pay and deductions from wages?

In Iraq, an end-of-service gratuity payment equal to two weeks’ salary for each year worked applies, with some exceptions (eg, termination for gross negligence causing harm). In addition, employers must pay a worker for any unused annual leave.

The Kurdish Labour Law requires employers to compensate employees for unused annual leave, but does not require them to pay an end-of-service gratuity.

Record keeping

What payroll and payment records must be maintained?

In both Iraq and Kurdistan, employers should maintain a wage and overtime register, including full details of their workers’ wages, wage deductions and net wages. Such registers should contain no omissions, erasures or additions and are subject to ministerial verification and inspection.

Discrimination, harassment & family leave

What is the position in relation to:

Protected categories

(a) Age?

The minimum age of employment in Iraq is 15 years old. The law defines a ‘minor’ as someone between the ages of 15 and 18 years old.

The retirement age is 60 years old, but workers may continue working past this age if they so wish.

Minors have special protections under both Law 37/2015 (the Iraqi Labour Law, which governs employment relationships in most of Iraq) and Law 71/1987 (the Kurdish Labour Law, which governs employment relationships in the semi-autonomous Kurdistan Region (comprising the Duhok, Erbil and Sulaymaniyah provinces)). For example, they are prohibited from working in jobs that may damage their health, safety or morality. Minors must also undergo regular health checks to ensure that their work is not causing them harm.

The labour laws also provide for special restrictions on minors’ working hours and grants them an additional nine days’ annual leave per year (10 days in Kurdistan).

(b) Race

Both the Iraqi and Kurdish Labour Laws prohibit race-based discrimination.

(c) Disability?

The Iraqi Labour Law states that discrimination is prohibited, but does not specify physical or mental disability as a protected class.

Likewise, the Kurdish Labour Law provides for non-discrimination without mentioning disability as a protected class, but this non-discrimination is limited to those who are “able to work”. It is unclear how disabilities that may limit work are interpreted under the law.

In both Iraq and Kurdistan, the law permits employers to terminate workers who become incapacitated and are unable to work, as evidenced by an official medical report.

(d) Gender?

Both the Iraqi and Kurdish Labour Laws prohibit gender-based discrimination. In addition, women are granted certain protections under the laws.

(e) Sexual orientation?

Both the Iraqi and Kurdish Labour Laws are silent on the issue of sexual orientation.

(f) Religion?

Both the Iraqi and Kurdish Labour Laws prohibit religion-based discrimination.

(g) Medical?

In both Iraq and Kurdistan, workers may be terminated if they are unable to work due to an illness that lasts for more than six months, as evidenced by an official medical report.

Otherwise, beyond the laws’ general non-discrimination provisions, there are no additional rules regarding discrimination against workers based on disabilities or medical issues.

(h) Other?

Not applicable.    

Family and medical leave

What is the position in relation to family and medical leave?

In Iraq, new mothers are entitled to 14 weeks’ maternity leave at full pay. They may also take unpaid leave for up to one year with their employer’s consent. There is no paternity leave for fathers.

Both male and female parents may take up to three days’ unpaid leave to tend to a sick child who is under six years old.

Kurdistan provides 62 days’ paid maternity leave and allows for up to one year of unpaid leave. There is no paternity leave. Mothers with children under six years old may take up to three days’ unpaid leave to care for a sick child.

Harassment

What is the position in relation to harassment?

The Iraqi Labour Law specifically prohibits sexual harassment and any other behaviour that creates a hostile, intimidating or offensive work environment.

While the Kurdish Labour Law guarantees the right to work without discrimination, it does not specifically mention sexual harassment.

Whistleblowing

What is the position in relation to whistleblowing?

In Iraq, workers may not be fired once they have lodged an official complaint against their employer.

There are no explicit whistleblowing provisions in the Kurdish Labour Law.

Privacy in the workplace

Privacy and monitoring

What are employees’ rights with regard to privacy and monitoring?

Both Law 37/2015 (the Iraqi Labour Law, which governs employment relationships in most of Iraq) and Law 71/1987 (the Kurdish Labour Law, which governs employment relationships in the semi-autonomous Kurdistan Region (comprising the Duhok, Erbil and Sulaymaniyah provinces)) are silent regarding privacy and monitoring, although the Iraqi Constitution enshrines a right to personal privacy. The laws do recognise a distinction between professional and personal monitoring – for example, cameras are permitted in the workplace for security reasons. Further, it is permissible to monitor workers’ activity on work-issued computers, but not on personal computers which are used for non-work purposes.  

To what extent can employers regulate off-duty conduct?

In both Iraq and Kurdistan, employers can do little to regulate a worker’s off-duty conduct. Even the provisions in the Iraqi and Kurdish Labour Laws which regulate drug use are limited to such use’s impact on the workplace.

Are there rules protecting social media passwords in the employment context and/or on employer monitoring of employee social media accounts?

Both the Iraqi and Kurdish Labour Laws are silent regarding employer monitoring of employees’ social media accounts. However, the Iraqi Constitution enshrines a right to personal privacy.

Trade secrets and restrictive covenants

Intellectual property

Who owns IP rights created by employees during the course of their employment?

Neither Law 37/2015 (the Iraqi Labour Law, which governs employment relationships in most of Iraq) nor Law 71/1987 (the Kurdish Labour Law, which governs employment relationships in the semi-autonomous Kurdistan Region (comprising the Duhok, Erbil and Sulaymaniyah provinces)) consider the creation of intellectual property by employees. Employers should be able to include legally enforceable language regarding this issue in their employment contracts.

By law, workers are prohibited from disclosing trade secrets that they learn during their employment.  

Restrictive covenants

What types of restrictive covenants are recognised and enforceable?

Under both the Iraqi and Kurdish Labour Laws, employers can place restrictions on former employees, but such restrictions must be reasonable. For example, employees can be prohibited from dealing with their former employer’s clients for one year to three years, but a 20-year prohibition would not be permitted. Any restrictive covenants should be agreed in the employment contract.

Non-compete

Are there any special rules on non-competes for particular classes of employee?

There are no special rules regarding non-compete clauses for particular classes of employee. While the Iraqi Labour Law guarantees freedom of work and notes that the right to work may not be restricted or denied, employers may place reasonable restrictions on a former worker’s future employment. Non-compete clauses should be reasonable and agreed in the employment contract.

Discipline and grievance procedures

Procedures

Are there specific laws on the procedures employers must follow with regard to discipline and grievance procedures?

Worker discipline is regulated in both Iraq (by Law 37/2015, which governs employment relationships in most of Iraq) and Kurdistan (by Law 71/1987, which governs employment relationships in the semi-autonomous Kurdistan Region (comprising the Duhok, Erbil and Sulaymaniyah provinces)). The ministry has issued model disciplinary rules as guidance, but employers can create their own internal regulations. Any disciplinary regulations must be approved by the labour and training office before they can be used.

By law, employers have 15 days from notification of an alleged offence to impose disciplinary measures. Dismissal is a permitted punishment for limited infractions, but there are strict limitations on its use.

Industrial relations

Unions and layoffs

Is your country (or a particular area) known to be heavily unionised?

Iraq (including the semi-autonomous Kurdistan Region (comprising the Duhok, Erbil and Sulaymaniyah provinces) is heavily unionised.

What are the rules on trade union recognition?

Iraq guarantees employees the right to form and join trade unions. If a dispute between an employer and a worker who is a member of the union proceeds to the labour courts, a member of the union will sit in on the hearing and discuss the matter with the judge.  

What are the rules on collective bargaining?

Law 37/2015 (the Iraqi Labour Law, which governs employment relationships in most of Iraq) recognises collective bargaining and devotes a chapter to the process. By law, employers must negotiate a collective bargaining agreement where they receive such a request from a registered union representative who represents more than 20% of the workers in the company.

A negotiation request must be in writing and a response must be sent within seven days of receipt. The union and the employer generally then have 14 days to negotiate in good faith to conclude an agreement.

If the process results in an agreement, the agreement becomes registered as a collective agreement. If there is no agreement, a party may request that the Department of Employment and Loans settle the dispute.

Negotiation to renew a collective agreement must begin within three months before its expiry. However, existing agreements may continue for three months after their expiration so long as negotiations continue. If there is still no agreement, a party may request that the Department of Employment and Loans settle the dispute.

Termination

Notice

Are employers required to give notice of termination?

When termination is permitted in Iraq, the law requires 30 days’ notice.

Law 71/1987 (the Kurdish Labour Law, which governs employment relationships in the semi-autonomous Kurdistan Region (comprising the Duhok, Erbil and Sulaymaniyah provinces)) provides no notice period, as termination under the law is difficult. The law generally requires workers to give their employers 30 days’ notice on resignation.

Redundancies

What are the rules that govern redundancy procedures?

Redundancies are generally not permitted under Law 71/1987 or Law 37/2015 (the Iraqi Labour Law, which governs employment relationships in most of Iraq). The most common method of ending an employment contract is via written mutual agreement with the worker.

However, when there is a reduction in the work of an enterprise, the employer may terminate workers, but only with ministerial approval.

Are there particular rules for collective redundancies/mass layoffs?

Neither the Iraqi nor the Kurdish Labour Laws envision mass layoffs apart from in the case of liquidation. Termination without cause is generally not permitted under Iraqi or Kurdish law. Employers may terminate employees when a reduction in workforce is required, but only with ministerial approval.

Protections

What protections do employees have on dismissal?

If a worker in Iraq is dismissed for cause according to the law, they will still have recourse to the End of Service Committee or the labour courts, provided that they file their claim in a timely manner (generally 15 days in Kurdistan and 30 days in Iraq.)

Courts/tribunals

Jurisdiction and procedure

Which tribunals or courts have jurisdiction to hear complaints?

Both Law 37/2015 (the Iraqi Labour Law, which governs employment relationships in most of Iraq) and Law 71/1987 (the Kurdish Labour Law, which governs employment relationships in the semi-autonomous Kurdistan Region (comprising the Duhok, Erbil and Sulaymaniyah provinces)) establish a system of labour courts in Iraq with jurisdiction to hear cases that involve civil and criminal actions arising from:

  • the labour laws;
  • the law on pensions and social security; and
  • other related legislation.

If the relevant labour court is unavailable, the Court of First Instance may have jurisdiction.

Alternatively, disgruntled workers also have access to the Ministry of Labour and Social Affairs and the End of Service Committee.

What is the procedure and typical timescale?

In both Iraq and Kurdistan, workers may challenge their termination before the End of Service Committee or the labour courts. There is a 30-day statute of limitations in Iraq and a three-year statute of limitations in Kurdistan.

The Iraqi and Kurdish Labour Laws both note that labour actions are considered urgent, but it is unclear how this affects the timescale for cases once they begin.

Appeals

What is the route for appeals?

If a worker chooses the End of Service Committee to hear their dispute, they may appeal to the labour courts within 30 days of the decision.

Once a labour court makes an initial judgment, an appeal may be made within 30 days to the Court of Cassation. No further appeal is permitted once the Court of Cassation renders a decision.

There are different filing deadlines for those against whom a judgment is made in absentia.