International Newsletter

Jordan’s New Labour Law Amendments Impact the Employment Relationship

October 28, 2019
Jordan

Jordanian Labour Law No. (8) of 1996 is the primary piece of legislation governing the relationship between employers and employees in Jordan. In mid-May 2019, this law was amended by Law No. (14) of 2019, which was issued in the Official Gazette. The amended law introduces new provisions that impact 40 articles of the Labour Law. However, the amended law’s most significant impacts on the employment relationship include amendments to wages, overtime, paternity leave, annual leave (e.g., vacation), childcare, retirement, and the resolution of wage disputes.

The following is a brief overview of these significant changes.

Wages

The amended law introduces the concept of “wage discrimination,” defined as wage inequality between employees based on gender. Employers that discriminate against employees by setting wage rates based on gender are subject to a penalty ranging between JOD 500 and 1,000 (approximately USD 700 to 1,400). This is a significant change that follows the global movement toward equal pay in other developed jurisdictions.

Overtime

Article 57 of the Labour Law capped obligatory overtime at 20 days per year. However, the amended law increases that cap to 30 days per year.

Wage Disputes

The Wage Authority previously resolved any wage disputes (including, but not limited to, late payment, nonpayment, discrimination in payment, and unjustified deductions) provided that the complaining employee was still employed with the company. Therefore, after termination of employment, an employee did not have any recourse regarding wage disputes. Under the amended law, however, the Wage Authority can resolve wage disputes not only while the employee is employed, but also for a period of six months after employment has ended if the contract was unilaterally terminated by the employee.

Annual Leave

Although the overall annual leave allotment has not been increased, the amended law provides a financial remedy for employees that can show that they were unable to take their annual leave. Specifically, the amended law enables employees to demand payment in lieu of annual leave in the event that the employer fails to approve the employee’s annual leave requests for a consecutive period of two years.

Paternity Leave

Prior to the amended law, the Labour Law did not contain any provision on paternity leave. However, the amended law grants new fathers three days’ paid leave after the birth of a child. Again, this is an interesting and progressive development on the part of the Jordanian legislators.

Nursery

Provision of a nursery in the workplace was already required under Article 72 of the Labour Law, subject to specific conditions. Specifically, the requirement to establish a nursery was triggered when there were at least 20 female employees in the workplace. The amended law has removed this condition and no longer specifies any minimum number of female employees in the workplace. Rather, the obligation to establish a nursery is now triggered when the employees cumulatively have at least 15 children under the age of 5.

Retirement

The amended law emphasises the right to extend the enforceability of the employment contract even after the age of retirement; previously, the automatic termination of an employment relationships was triggered upon an employee reaching the age of retirement. In addition, pursuant to the amended law, mandatory retirement is now subject to the employee satisfying all retirement conditions, including the payment of required subscriptions.

Comment

The amended law has generally been welcomed and well received, even though employees had hoped that the amended law would introduce an increase in the minimum annual leave entitlement. Overall, the amended law is indicative of a progressive shift in Jordanian legislation.

Written by Hala Qutteineh of Al Tamimi & Co. and Christopher V. Anderson of Ogletree Deakins

© 2019 Al Tamimi & Co. and Ogletree, Deakins, Nash, Smoak & Stewart, P.C.