Kurdistan

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KEY DEVELOPMENTS FOR 2024

New labour law

In 2023, the Kurdistan Regional Government (“KRG”) legislature ratified a labour law (the "Draft Labour Law") intended to replace the current Labour Law No. 71 of 1987. However, due to reasons not directly related to the content of the Draft Labour Law, but instead concerning the legality of the KRG legislature itself for that specific period (when the Draft Labour Law was passed), all laws passed by this body were effectively nullified by the Federal Supreme Court of Iraq. In any case, in expectation of the Draft Labour Law being re-ratified, potentially in 2024 when the KRI legislature is re-elected, we set out key provisions of the Draft Labour Law (subject to amendments when re-considered by the KRI legislature).

One of the key changes in the Draft Labour Law is the introduction of provisions against sexual harassment and discrimination in the workplace, which are not comprehensive in the existing Labour Law. This includes provisions that entitle women to equal pay for equal work. Additionally, the Draft Labour Law includes broader provisions on the rules for employing minors, as opposed to the existing Labour Law, aiming to protect their rights and ensure they are not exploited. The Draft Labour Law also includes provisions that ban slavery and introduce new rules regarding migrant domestic workers in the KRI. It also includes definitions for different types of work, such as temporary, seasonal, casual, and part-time work. The Draft Labour Law is expected to complement new regulations by the KRI Council of Ministers that place a 25% quota on the employment of foreign nationals by employers in the jurisdiction.

Another noteworthy inclusion in the Draft Labour Law is the introduction of parental leave for men, recognizing the importance of shared parental responsibilities. The Draft Labour Law also introduces end-of-service gratuity for employees, which is a payment made to an employee upon the termination of their employment contract. This means that when an employee leaves their job, they will now be entitled to receive a lump sum payment in recognition of their years of service. This is a significant benefit for workers, as it provides a form of financial security when they leave their job. Finally, the Draft Labour Law increases the annual leave for employees to 24 calendar days a year. This amount increases incrementally following every five years of service. This is an improvement from the existing Labour Law, which currently provides for 20 calendar days of annual leave. The Draft Labour Law, as it stands, will require employers to amend existing employment contracts to comply with the new law's provisions within 90 days of the law's passage in the official KRI gazette.

Quota on foreign employment

Earlier in 2023, the KRI Cabinet of Ministers (“COM”) issued Instruction No. 7 of 2022 (“COM Instructions”) regulations, placing a twenty-five percent (25%) quota on foreign employment by private companies in the KRI. Pursuant to the COM Instructions, a foreign employee is defined as a natural person who does not hold Iraqi citizenship and is presently employed in the KRI. The COM Instructions intend to promote the employment of the national workforce. The COM Instructions further state that employers that have fewer than four employees are not permitted to employ foreign employees. In practise, the relevant regulator, KRI Ministry of Labour is intending to clarify the implementation of these instructions, and their interpretation of the COM Instructions are under development and subject to change.

KEY DEVELOPMENTS FOR 2023

New Draft Labour Law KRI

The Kurdistan Region of Iraq (KRI)’s Parliament has held its second reading of the draft labour law (the “New Draft Labour Law”) expected to replace the existing Labour Law No. 71 of 1987.

The New Draft Labour Law is expected to introduce significant changes and remove legal ambiguity arising from the existing labour law (Labour Law No. 71 of 1987). The Draft Labour Law provides more specificity by providing definitions for different types of work, part-time work, and types of employees such as foreign employees.

Employers are advised to seek comprehensive legal advice on the New Draft Labour Law that is expected to be ratified by the KRI Parliament by Q1 of 2023. Amendments may occur to the New Draft Labour Law at the 3rd reading of the law in the KRI Parliament.

Appropriate Work Program

In September 2019, Iraq and the International Labor Organization (‘ILO’) launched the KRI's first National Decent Work Program to be activated between 2019 and 2023.

The program’s main aim is to develop, and activate the private sector and to protect, and ensure appropriate work for all employees operating in Iraq.

The program focuses on three priority aspects:

1. ensuring that private sector development supports new jobs;

2. expanding and strengthening social protection, addressing child labor; and

3. improving social dialogue to enhance rights at work.

The program’s major achievements thus far in achieving the above priority aspects are as follows:

1. Launching the first nationwide labor force survey, the results of which will support the development of evidence-based national employment policies.

2. The ILO has led a rapid assessment of the impact of COVID-19 on the labor market in Iraq.

3. Helping refugees and displaced persons to give them access to skills and public employment services in the Kurdistan Region of Iraq.

4. Developing an effective framework to ensure a reduction in the number of Iraqi children forced to work.

5. Improving the effectiveness of labor inspections and occupational health and safety services in preventing and detecting non-compliance with national and international labor standards.

Employers are encouraged to contribute their assistance in activating the aims of this program by reviewing the upcoming Retirement and Social Security law, a draft of which is currently being reviewed with the support of the ILO and by supporting the development of a national policy on labor inspection and occupational health and safety.

Social protection program

The overall aim of this program is to ensure that the vulnerable and poor, including children, youth, women, the elderly, informal sector workers, people with special needs and displaced persons in Iraq (including the KRI), have equal opportunities to be included and provided effective social security by 2023.

By 2023, pregnant women and children under the age of five or of school going age in poor families will have equitable access to social security services and programs.

Employers are encouraged to support legislative reform that would expand the scope of social security in the KRI and bring the legislative framework of Iraq and the KRI in line with ILO’s Recommendation No. 102 on minimum social security standards.

Employers are further encouraged to support the process of enhancing the capacity of the Ministry of Labor and Social Affairs to effectively provide social security by supporting institutional processes, IT infrastructure, human resources, and internal operating standards in the KRI.

KEY DEVELOPMENTS FOR 2022

Potential overhaul of domestic labour laws

The labour law applicable in the Kurdistan Region of Iraq (the “KRI”) is from 1987. It is out-dated and ill-suited to govern modern day employment relationships. A draft of a new labour law has been circulating between the KRI Ministry of Labour and the KRI Parliament for several years now and it is anticipated that it will have its first reading sometime in 2022.

Employers should continue to monitor developments in this area of law. Once these changes have come into force, employers should update their existing template employment documents and policies accordingly and establish processes to ensure compliance with any additional mandatory reporting obligations.

Proposed digitilisation plan

The 9th Cabinet of Ministers of the KRI, which is currently in its pen-ultimate year, is expected to continue and accelerate its government digitalisation plan into 2022. The plan so far has encompassed company registration, public employee wages, trademark registration, and other sectors in order to facilitate public service of process.

The impact on employers will ideally mean less of a burden in terms of service of process when applying for government permits, registrations, approvals, etc. The digitisation plan is in its early stages and the present focus is making government information public online. However, employers should continue to monitor developments in this area, especially as it relates to the Ministry of Labour. It will also be important to pay attention to electronic visas and changes in that regard.

Updates to and consolidation of existing IP laws

In 2019, the KRI Cabinet of Ministers announced that it would update and fully implement legislation on intellectual property to protect KRI, academics and businesses from infringement. A legal committee has been established to this effect to review new draft legislation for approval in this session of the KRI Parliament.

Enforcement of existing IP law and the consideration of draft IP laws, will have a direct impact on companies operating in the KRI, as well as the IP relationship between employers and employees. Employers should continue to monitor developments in this area of law and modify their internal policies and procedures in accordance with these developments.