Shura Council to review unemployment insurance accounts and labour permit cap bill

The Shura Council will review today the audited 2023 accounts of the Unemployment Insurance Fund and discuss a proposed amendment to the Labour Market Law, which a Shura committee has opposed in principle. Members will consider the Financial and Economic Affairs Committee’s report on the audited report and financial statements for the year ended 31 December 2023, after the Board of Directors of the Social Insurance Organisation approved it. The committee recommended approving the audited report. The committee said the papers are being submitted to the legislative authority for the first time under paragraph (e) of Article 9 of the Decree-Law on Unemployment Insurance.

Amendment

This follows a 2023 amendment introduced after a legislative initiative aimed at strengthening cooperation between the legislative and executive branches. In its notes, the committee said that almost 20 years after the account was created, and as it continues to meet the aims it was set up for, it is time to review how it works and how it is used. The committee added that consideration should also be given to whether its scope can be widened, while maintaining its original goal of providing social protection for citizens as a key support for social stability. The committee said the 2023 figures point to a healthy position, with contributions exceeding benefits by about BD54.4 million, compared with about BD51.3 million in 2022.

Presentation

It also called for clearer presentation in the statements, recommending that assets be shown as current and non-current in the statement of net assets, in line with International Financial Reporting Standards.

This, the committee said, would improve financial analysis, enhance disclosure and transparency, and make comparisons with similar statements easier for decision-makers and stakeholders.

The committee added that the audited statements were missing a statement of comprehensive income, often referred to as the profit and loss statement, and said it should be included as part of audited financial statements.

In the same sitting, the Council is due to examine the Services Committee’s report on a draft law amending Article 4 of Law No. 19 of 2006 on regulating the labour market, drawn up on the basis of a proposal submitted by Parliament.

Approval

The committee recommended, in principle, that the draft law should not be approved. The Services Committee said the proposed wording would reduce the law’s flexibility and make it harder to respond to economic shifts, arguing that a fixed numerical cap would limit powers and add extra steps without meeting its stated aim. Keeping the rule in permissive form, it said, leaves room to act when needed. It also said a cap would not necessarily cut work permits in practice, arguing that bodies tasked with national plans could set the ceiling high enough to cover expected and unexpected needs over a four-year plan, leaving the limit as a paper rule. Policy The committee said workforce replacement works best through joined-up policy, including targeted training, ongoing skills building, wage support and incentives, and pointed to programmes intended to raise Bahrainisation rates on a balanced footing. It added that a strict cap would also affect the legal right of Bahraini employers to apply for permits they see as needed to raise output and expand their businesses, in a way that serves economic growth and sustainable development goals.