Employment in the Syrian Private Sector: Law and Practice
Syria’s labour code is contained within the provisions of the Employment Law 17/2010, which applies to relationships between employers and employees in the private sector. Law 17/2010, unlike its predecessor Law 91/1959, is considered friendlier towards employers. Its enactment in 2010 was an attempt to encourage domestic and foreign investments, which were gaining speed at the time in Syria. Law 91/1959 on the other hand had come into force during the era of Gamal Abdel-Nasser and the United Arab Republic. In keeping with the socialist leanings of his government, it laid down several protections for employees. Its favorable approach to employees made employers nervous and they sought to protect themselves by refusing to sign employment contracts with their employees. Hence, the informal employment sector began to grow at quite an alarming rate.
As Syria was moving towards a market-based economy before the present conflict erupted, the government’s strategy for promoting investments in the country involved lifting certain employment restrictions. There is an overall attempt to balance out the rights and obligations of employers and employees but when compared with its predecessor, Law 17/2010 represents a slight departure from the greater protections afforded to employees. Nonetheless, it is worth emphasizing that employees do retain various rights.
To a certain degree, Law 17/2010 may be extended to employment in the joint public-private sector where public-private partnership agreements are concluded authorizing a private sector investor to operate a public asset or facility. After the asset or facility is corporatized and transferred to the private sector for operation, the workforce retains its status as public sector employees while benefiting from certain rights under Law 17/2010. Such examples include the public assets now managed by Russian investors, such as the port and phosphate facilities, where these employment matters concerning the workforce have been addressed contractually.
It is also worth bearing in mind that Law 17/2010 does not apply to public sector employees and civil servants in general who are instead subject to the authority of the State Employment Law 50/2004. Furthermore, Law 17/2010 does not govern the employment of specially designated public officials, which rather falls under the authority of the decades-old Basic Personnel Law 135/1945. For example, the Public Prosecutor is appointed pursuant to the Basic Personnel Law.
There are other employment relationships that are carved out of Law 17/2010. The employment of individuals in the agricultural sector is regulated by Agricultural Relations Law 56/2004 and not the provisions of Law 17/2010. As for foreign domestic workers, they fall under the purview of Legislative Decree 65/2013, which was amended by Law 40/2017. Moreover, the framework for the employment of foreign nationals is laid down in Law 17/2010 but rather regulated in detail by the Foreign Employees Rules provided for in Ministry of Social Affairs and Labour Resolution 888/2016.
More legal protections are afforded to women in the workplace, which are further touched on in Ministry of Social Affairs and Labour Resolution 482/2017. It clarifies the terms and conditions for the employment of women. Furthermore, the Ministry of Social Affairs and Labour is working on several initiatives to improve the conditions of women in general, including in the Employment Law and the Personal Status Law, given that they have taken on more responsibilities during the war. The concept of maternity leave is also expected to be expanded in upcoming legislation.
Employment contracts are mainly characterized as either limited-term contracts, which have a fixed start and end date, or unlimited-term contracts, which are open-ended. There are also project-specific contracts that expire upon completion of the given project and any termination by the employer before that point is deemed unfair dismissal. Employers are required to draft written contracts for their employees in Arabic and each party shall retain a copy of the contract while the employer shall also deposit a copy with the competent Directorate of Social Security in their respective province within three months. In the absence of a written agreement, an employee may establish the existence of an employment relationship and their entitlements pursuant to the work they have carried out using all methods of proof while the employer has the right to similarly prove the contrary. Any employment contracts that give employees fewer rights than those provided for in the Employment Law are deemed null and void.
There are other factors that employers and employees have to bear in mind when entering into employment contracts. Employers need to take into consideration the minimum wage, which was recently increased by Legislative Decree 23/2019 from SYP 16,175 to SYP 47,675 per month for all sectors, not just the private sector. It should also be noted that once they are employed, employees are not allowed to work for third parties with or without pay without the consent of their employer.
Law 17/2010 also sets limitations for the number of hours and days employees are expected to work, which include eight hours per day or 48 hours per week. Nevertheless, there are exceptions when the number of hours may be increased. Employers shall pay employees for overtime hours at the rate of the regular hourly wage plus a 25% supplement for daytime work and a 50% supplement for nighttime work, which shall be doubled in the case of overtime hours during official holidays. The working week is six days. If the employer requests their employee to work on their weekly day off, the employee shall be paid double their wage and their day off shall be compensated for the following week. If employees are requested to work during official holidays, they shall be entitled to twice their daily wage as well as the daily wage itself.
In addition to other official holidays, individuals who have been employed for at least one year and up to five years are entitled to an annual leave amounting to 14 working days with pay. The annual leave is increased to 21 working days for individuals employed for more than five years and up to 10 years. For those employed for longer than 10 years or who are over the age of 50 years, they are entitled to an annual leave consisting of 30 working days. The annual leave of employees who work for less than one year is calculated on a pro rata basis.
Other types of leave are provided for in the Employment Law as well. Employees who prove to be ill can claim sick leave. Consequently, they are entitled to a leave with pay at the rate of 70% of their salary for the first 90 days and 80% of their salary for the following 90 days. Employers may send employees on educational and training leaves with pay. Employees are also entitled to a one-off pilgrimage leave with pay, marriage leave with pay, maternity leave with pay and grievance leave with pay. Moreover, none of these leaves of absence shall be considered as part of the annual leave. Furthermore, employees shall be entitled to request unpaid leave for 30 consecutive days per year. Provision is also made for administrative leave.
An employer may terminate a limited-term contract at any time provided they pay the employee their salary for the remaining duration of the contract. If the employee terminates the contract, they must provide two months’ written notice prior to the termination or pay the employer compensation amounting to the salary for the notice period or the remaining portion thereof. Moreover, limited-term contracts that may be renewed have a maximum length of five years before they are deemed unlimited-term contracts as long as any accumulated absences during the employment period do not exceed four months.
Either an employer or an employee may terminate an unlimited-term contract provided they give two months’ written notice. If either one does not comply with this condition, they then become liable to pay compensation amounting to the salary for the notice period or the remaining portion thereof unless the employee is excused from the duty to give notice. Under both limited-term and unlimited-term employment contracts, employers may permit employees to refrain from working during the notice period but shall nevertheless consider their service ongoing until the notice period expires.
A probationary period of no more than three months may be agreed between the employer and the employee. In effect, it grants both parties a grace period before engaging in a longer-term employment relationship and the entitlements it entails. During the probation period, either party may terminate the contract without prior notice or compensation without incurring any legal liability. If both parties are satisfied to continue the employment relationship, the probation period shall count towards the actual service of the employee.
An employee’s resignation shall be deemed valid only when the employee registers it with the competent Directorate of Social Affairs and Labour. However, the employee shall have the option to withdraw their resignation in writing only once within one week of being informed that it has been accepted by the employer and thereby revive their employment status. During the COVID-19 crisis, the Ministry of Social Affairs and Labour announced that it would not register any resignations by employees and furthermore, employers had to continue to pay the salaries and social security contributions of their employees.
Employment contracts shall terminate under certain circumstances, such as when both the employer and employee mutually agree in writing to do so; whenever an employee attains 60 years of age but not including limited-term contracts that provide for employment beyond that age; in the event of the employee’s death, in which case the deceased’s family or individual designated by the employee shall be entitled to an allowance amounting to two months’ salary in addition to the full salary for the month in which the employee passed away; in the event of total disability but not for partial disability if the employee may be assigned to a different position that suits their ability; whenever the employee contracts an illness causing an annual absence of at least 180 consecutive days or more than 200 intermittent days in one contractual year; or due to an event of force majeure which cannot be mitigated. If these circumstances arise and employment contracts are terminated accordingly, compensation payable in the event of unfair dismissal is not applicable.
If an employee commits a wrongful act, their employer may dismiss them without any prior notice, compensation or severance payment. If the employer is unable to prove that the employee committed a wrongful act, such action shall be considered as unfair dismissal and gives rise to compensation payable to the employee. The amount of compensation is calculated as two months’ salary based on the last monthly salary earned by the employee for each year of service for a total payment not exceeding 150-times the minimum wage. Furthermore, if an employer commits a wrongful act, the employee may resign their position before the expiry of the contractual term without giving notice to the employer and claim for unfair dismissal. However, the employee must bear the burden of proof in this case.
Employers may suspend employees accused of committing a criminal offense at the workplace. If the employee is not prosecuted, they shall be entitled to return to their position and obtain full payment for the period of their suspension. If the employer does not comply, the employee shall have the right to claim compensation for unfair dismissal. If the employee was accused at the instigation of the employer, the employee may additionally claim for moral and material damages.
Potential amendments to the Employment Law are being drafted in a way to provide alternative arrangements for how termination and compensation provisions are treated when compared with current practices in place. While there are specified instances when an employer can terminate their employee’s contract whether it be limited-term or unlimited-term without any prior notice, salary or severance payment, such provisions are becoming regarded as contrary to the spirit of the Constitution of 2012. They are perceived as punishing an employee with multiple penalties for a single act. Hence, changes to legislation could potentially see an employee in this case only forfeiting their severance payment upon dismissal under these specified instances.
The rationale for the proposed changes is part of an effort to achieve a more balanced approach between the relevant parties, close loopholes discovered during the conflict and harmonize domestic legislation in accordance with international conventions that Syria has ratified. According to the Ministry of Social Affairs and Labour, the proposed amendments to the Employment Law do not constitute more than five percent of the current legislation. At one point, the Ministry of Social Affairs and Labour proposed amendments to 26 articles of the Employment Law, one of which would grant a periodic increase in salaries to employees in the private sector by nine percent every two years in light of inflationary pressures. New definitions were also expected to be introduced for the types of remuneration provided to employees.
It is important to understand the nature of severance payments and their applicability. Law 17/2010 does not make much provision for severance payments at the end of an employment contract as reference is made to social security payments to covered employees to address this matter. Nevertheless, in the event an employee does not have social security coverage, they are entitled to a severance payment amounting to one month’s salary based on the last monthly salary earned by the employee for each year of service, or on a pro rata basis if the employment lasts for less than one year.
Social security is legislated for in the Social Security Law provided for in Legislative Decree 92/1959, a legacy of the Nasser era, though this Law has been amended over the years. The General Establishment for Social Security (GESS) handles pension payments to retired employees from the contributions made by both employers and employees in previous years. Another important function of GESS is to provide insurance protection for its members, such as against accidents in the workplace. The only persons who can benefit from these social security provisions are those who are registered with GESS. Employers who fail to register their employees with GESS in accordance with the Social Security Law are fined for every unregistered employee.
Prime Ministerial Resolution 22/2015 permits Syrians working abroad to obtain social security protection. Furthermore, Prime Ministerial Resolution 49/2016 mandates the replacement of the US Dollar with the Syrian Pound for the purposes of registering Syrians working abroad with GESS.
In addition to a 0.1% duty, an employer contributes 17% of an employee’s salary and further forwards seven percent of the latter’s salary on their behalf to GESS within the first 15 days of each month. Failure to make these payments on schedule results in interest liabilities of six percent per annum on unpaid premiums and fines amounting to 10% of monthly premiums for each month the employer is late but not more than 30% of the total premium due to GESS. Legislation was passed during the conflict to exempt employers registered with GESS from paying interest and fines if they paid their dues.
As amended by Law 78/2001, pensions are calculated at the rate of 2.5% of the average monthly earnings multiplied by the number of years of contributions. After a period of 30 years of employment, the maximum pension available is set at 75% of the average monthly salary. From time to time, the Council of Ministers approves advance payments to GESS in order to finance the pensions of retirees.
Deliberations have been underway to amend not only the Employment Law but also the Social Security Law for a while now. The potential amendments seek to fill gaps between the two Laws while protecting the interests of employers and employees in the post-conflict phase. With respect to social security, reforms envisage a widening of the categories of insured individuals and the incorporation of a joint stock company to be named the National Corporation for the Investment of Social Security Funds. It would be wholly owned by GESS and incorporated in accordance with the Companies Law with its main objective being to invest the funds of the organization. The incorporation of such a company has been endorsed by the Economic Committee affiliated to the Council of Ministers.
The newly ratified Chambers of Commerce Law formally codified a recent practice that came to light. Merchants or businesses registered or intending to register with a chamber of commerce are now obliged to hire at least one employee, regardless of whether they require their services, and register them with GESS. It would only be then that the business owner is granted a chamber of commerce membership card. Furthermore, registration with a chamber of commerce is a precondition to applying for import licenses. The measure was introduced after a large number of individuals sought to obtain the membership card only to be able to travel to Lebanon without visa restrictions but not to undertake any trading activities. The result was that the chambers of commerce became flooded with new members who were not necessarily engaged in any sort of business. Consequently, the requirement to formally register an employee with GESS was imposed to stem the surge in hollow memberships. The move caused a lot of criticism because most businesses in Syria are family-run and do not rely on formal recruitment but rather family members. In fact, the obligation to register an employee with GESS was the reason behind the postponement of elections for the chambers of commerce as membership numbers began to dwindle in light of this new rule.
The concepts of corporate restructuring and redundancy are recognized to an extent under the Employment Law. For instance, the merger of a firm with another or its acquisition by another company imposes joint and several liabilities on such firms with respect to the relevant employment contracts. Other forms of corporate restructuring affecting the employment of individuals are also considered in Law 17/2010.
Provided that an employer’s decision to totally or partially shut down or substantially downsize their business affects a considerable number of employees, mechanisms are put in place to determine whether the employer’s action is justified. In any case, requests to cease operations must be submitted to the Ministry of Social Affairs and Labour so as to avoid social security liabilities. Such circumstances arose after numerous businesses were vandalized during the war. The Ministry of Social Affairs and Labour formed committees in the various branches of GESS located throughout the provinces in Syria to address the rights of employees when operations at their workplaces were unlawfully stopped, thus leaving them in a precarious position.
As for businesses that continued to operate during the war, employers at times delayed paying salaries, which forced the government to interfere. A prime ministerial directive was issued requiring employees located in conflict areas to be paid their salaries by their employers. Employees had to present their identity cards, signatures and fingerprints in order to claim their salaries.
To a degree, provision in the Employment Law is also made for furlough, which basically means that employees are granted a leave of absence for a certain period of time where they do not work and are not paid either. However, they are expected to retain their employment benefits and entitlements apart from their salary. Furlough is qualified under Law 17/2010 by the fact that a leave of absence brought about by extenuating circumstances may not result in zero pay for an employee. Rather, when an employee is precluded from working by reasons beyond the control of the employer such as due to a force majeure event that is capable of mitigation, the employee shall be entitled to half their salary. It is for the employer to decide whether to maintain normal shifts, if possible, under such exceptional circumstances.
Such situations arose during the COVID-19 crisis. Consequently, the Ministry of Social Affairs and Labour prepared a database of individuals whose jobs had been affected by the preventative measures taken by the government against the potential spread of COVID-19. Such persons were then granted financial support from the National Fund for Social Aid maintained by the Ministry of Social Affairs and Labour. As a consequence, the Council of Ministers approved the online initiative proposed by the Ministry of Social Affairs and Labour entitled the National Campaign for the Emergency Social Response. Its objective was to provide financial aid to almost 100,000 workers affected by the COVID-19 preventive measures, which reportedly suggested allocating up to SYP 100,000 to every individual. Unemployed persons who could register and apply for aid were categorized as those either 70 years of age or older, had special needs, were formerly daily or seasonal workers, or were formerly self-employed.
Given the state of war in Syria since 2011, the government has also issued other directives to the effect that persons subject to conscription in accordance with the Military Service Law provided for in Legislative Decree 30/2007 shall retain their employment rights, including those pertaining to remuneration and promotions while serving on military duty. On a related subject, Syrian youth with deferred military service obligations are reportedly finding it difficult to seek employment as employers are nervous to take on recruits who may be called up for military service in the near future. Deferment of conscription after all is only possible as long as the individual concerned is in educational placement.
The employment of foreign nationals in Syria is governed by Resolution 888/2016, which was issued by the Ministry of Social Affairs and Labour and replaced the previous rules contained in Resolution 23/2010. The employment of foreign nationals is permissible as long as no Syrians are available to fill particular positions. According to the Foreign Employees Rules, foreign nationals must not compete with Syrian workers and their work experience and competence must be taken into consideration. They have to obtain a work permit and a residence permit for employment purposes. Delays in issuing work permits to foreign nationals in Syria are usually due to the Ministry of Social Affairs and Labour’s requirement to ensure that no Syrians can fill the relevant jobs. The number of foreign nationals employed by one employer cannot exceed 10% of the total employed workforce. The salaries of foreign employees cannot exceed 30% of the total salaries paid by that employer.
There are however additional restrictions imposed on the number of foreign nationals employed by banks, financial institutions, insurance companies and brokerages. The number of foreign nationals at these companies cannot exceed nine percent of the total employed workforce during the first two years of operations. They must gradually decrease to three percent of the total employed workforce after five years. If there is a lack of Syrian nationals capable of doing jobs at these companies, the Ministry of Social Affairs and Labour can raise these quotas.
The restrictions contained in Resolution 888/2016 do not apply to foreign nationals who have been resident in Syria for more than 15 years prior to the submission of their work permit application. They also do not apply if the potential foreign worker has a Syrian mother or is married to a Syrian national.
As for publicly-owned entities that employ foreign nationals, other considerations apply. A prime ministerial directive called on such entities to settle the status of their foreign employees in accordance with Law 17/2010 as legally mandated, specifically with regards to granting them renewable work permits. Such a position is contrasted with the treatment of Syrian nationals, who in this case would fall under the authority of the State Employment Law 50/2004.
Where disputes arise between employers and employees, specialized employment tribunals have been set up in every province to adjudicate accordingly but alternative dispute resolution processes are also available. Any appeals from the tribunals shall be made to the Court of Appeal, whose judgment is deemed final. Whenever the dispute concerns dismissal, mediation should be attempted first through the competent Directorate of Social Affairs and Labour. Employment tribunals are operated in accordance with Article 205 of Law 17/2010, which was specifically amended by Legislative Decree 64/2013.
As well as individual employment contracts, Law 17/2010 takes into account the influence of trade unions and collective employment contracts. Such agreements are concluded between trade unions, including those under the umbrella of the General Federation of Trade Unions, and employers for the benefit of employees and regulate their employment terms and conditions. The organizations governed by the General Federation of Trade Unions are comprised of one million members and 20,000 of their representatives.
Collective employment contracts shall be written in Arabic and submitted within 15 days of signature thereof for approval by the relevant trade union body. They become effective and binding after they are filed with the Ministry of Social Affairs and Labour and a summary thereof is published in the Official Gazette. They are concluded for a fixed term of no more than three years with a possible extension, or for the time needed for the completion of a given project. In the event of any inconsistency between an individual employee’s contract and a collective employment agreement, the more favorable clause to the employee shall prevail. Such agreements shall apply to all employees of a firm even to those who are not members of the respective trade union provided that two conditions are met. Firstly, trade union members do not constitute less than half of the firm’s total workforce on the relevant date of the agreement and secondly, its clauses are more favorable to the employees than their individual employment contracts.
Provision is also made to deal with collective labour disputes between an employer or a group of employers on the one hand and one or several trade unions on the other. An attempt should first be made to reach an amicable solution through collective bargaining before attempting mediation. If mediation does not work, an arbitral tribunal should be formed to conduct arbitration. The decision of the arbitral tribunal may be appealed before the Court of Cassation. The arbitral award shall become binding after its registration with the competent Directorate of Social Affairs and Labour.
One of the responsibilities of employees is to pay their income taxes, which is known as the payroll tax. Legislative Decree 42/2011 amends the Income Tax Law 24/2003 with respect to the taxable rates on salaries. Individuals employed in the private sector are only liable for the payroll tax as long as they are resident or undertake work in Syria. Payroll taxes are withheld by employers and paid to the General Commission for Taxes and Fees on a semi-annual basis within the first 15 days of July and January for the first and second halves of the year respectively.
The progressive tax brackets are as follows: individuals whose salaries reach up to SYP 10,000 are exempt from the payroll tax; five percent of any amount from SYP 10,001 to SYP 15,000 is taxable; seven percent of any amount from SYP 15,001 to SYP 20,000 is taxable; nine percent of any amount from SYP 20,001 to SYP 25,000 is taxable; 11% of any amount from SYP 25,001 to SYP 30,000 is taxable; 13% of any amount from SYP 30,001 to SYP 38,000 is taxable; 16% of any amount from SYP 38,001 to SYP 50,000 is taxable; 19% of any amount from SYP 50,001 to SYP 75,000 is taxable; and 22% on any amount over SYP 75,000 is taxable. Any such tax-related disputes are heard by the Council of State Administrative Court, the judicial body entrusted to adjudicate cases involving a state or public sector entity.