This post was contributed by Heros Leask, Associate at Norton Rose Fulbright (Middle East) LLP.

On September 2nd 2012, the Kingdomof Bahrain’s Legislative Decree Law No. 36 of 2012 (the New Law) took effect, replacing Decree No. 23 of 1976, the Labour Law for the Private Sector. The New Law was approved by the Bahraini Cabinet and brought into force a number of amendments to existing labour laws (largely reconciling differences between the public and private sectors). One of the changes enacted by the New Law has proved particularly controversial.

Under the previous Labour Law, employees who had completed one year’s continuous service were entitled to no less than 21 days’ annual leave (rising to 28 days after five continuous years of service). By convention “days” were interpreted as “working days” rather than “calendar days” (i.e. exclusive of weekends in the event that an employee wished to take time off which included weekends).

The position under the New Law is that all employees who have completed at least one year’s service will be entitled to 30 days’ paid annual leave, “days” being undefined. If an employee has worked for less than one year, the employee will be entitled to pro-rated leave corresponding to the period of his/her employment (two and a half days’ leave for each month of employment).

There was initial confusion in the business community with respect to how “days” should be interpreted. OnSeptember 18th 2012,Bahrain’s Labour Ministry issued a directive stating that leave days should be calculated as “working days”. Employees working a 5 day week would therefore be entitled to up to 6 weeks’ annual leave in addition to public holidays.

This generous interpretation left private sector employers with concerns about increased costs. Particularly for large industrial employers operating in Bahrain(employing hundreds or thousands of workers), a wide interpretation of “days” would create a huge financial burden.

With growing pressure from the business community, the Bahraini Cabinet declared in April that “days” should be construed as “calendar days”. This of course results in a lesser annual leave entitlement for employees than the earlier interpretation, and indeed means that some employees will be left worse-off under the New Law.

It has transpired that use of the term “days” in the drafting of the New Law was intended to refer to working days but was deliberately left open to interpretation, according to Shura Council second vice-chairwoman Dr Bahiya Al-Jishi, who was responsible for revising Bahraini labour laws with the Labour Ministry.

Dr Al Jishi has said “…I had revised the new Labour Law and recommended its articles… following guarantees by the Labour Ministry that the days are calculated as working days and because of such guarantees, I kept the definition of the holidays open without specifying it should be working days… but I am planning to make things right by having urgent amendments proposed.”

Dr Al Jishi’s proposed amendments have not, however, come into effect, and are unlikely to do so in light of the Bahrain Cabinet’s decision which overruled the earlier position taken by the Labour Ministry. It is expected that the more restrictive “calendar days” interpretation will remain and that the New Law will not be amended. Employers and employees are of course free to negotiate more generous annual leave provisions.