Jordan Compliance Questions Guidance

Information on existing and/or new laws in Jordan relevant to COVID-19  compliance issues. Useful for employers, unions, workers and managers navigating unfamiliar and complex scenarios.

What are the legal requirements on wages for workers unable to work due to government-ordered factory shutdown?

All workers should be paid full wages in line with the Labour Law for the period from March 18, 2020 until March 31, 2020.

Under Defence Order No. 6 (effective as of April 1, 2020):

If the factory is not operating at full capacity, employers can submit a request to the Minister of Labour to pay a minimum of 50% of the regular wage for non-working employees, provided it is not less than the minimum wage, and subject to certain checks and balances set out in Instructions to be issued by the Minister of Labour.  These requests should include the owner’s name; owner’s ID (for Jordanians), or Personnel No. (for non-Jordanians); the value of the wages; and the percentage of the wages that the owner can pay (not less than 50% of wage).

Enterprises that are not operating and are not able to pay workers’ wages should submit a request to the Joint Committee from the Ministry of Industry, Trade and Supply, and the Ministry of Labour to stop the work and suspend all work contracts for all workers (with no wage payments) temporarily until the end of the urgent situation.

In this case,

1. The employer may not perform any work or undertake any activity during the suspension period;
2. The contractual relationship between the employer and workers continues, but the employer is not required to pay workers’ wages during the suspension;
3. Aside from wages, all the employer’s other financial and contractual obligations to workers remain valid during the suspension period (e.g., provision of room and board);
4. Private sector employers shall not benefit from any Economic Protection Programs for the private sector as of the date of suspension;
5. Pursuant to a Decision by the Committee, a no disposal order will be placed on the movable and immovable assets of the establishment for the duration of the suspension.

(Council of Ministers Decision, March 17, 2020; Defence Orders No. 1 and No. 6 (2020), issued in accordance with Defense Law No. 13 of 1992; MoL Q&A Guide for Defence Order No. 6)

What are the legal requirements on wages during work stoppage/temporary shutdown (employer driven)?

Under Labour Law Article 50, workers are paid full wages for the first 10 days of a temporary dismissal, and 50% of their wages for the remaining period.  Wages include all cash or in-kind entitlements in addition to all other entitlements of whatever type, provided for by law, the work contract, CBA, or factory bylaw, or entitlements paid in practice, but do not include overtime wages.  Paid temporary dismissals are limited to sixty days in a year.  (Labour Law, Arts. 2, 50).

However, during the current period (Covid 19), Labour Law Article 50 has been suspended and replaced by Defense Order No. 6 (described under the question on legal requirements on wages for workers unable to work due to government-ordered factory shutdown). (Council of Ministers Decision, March 17, 2020; Defence Orders No. 1 and No. 6 (2020) issued in accordance with Defence Law No. 13 of 1992; MoL Q&A Guide for Defence Order No. 6.)

What are the legal limits on the duration of any suspension of labour contracts for economic reasons?

A temporary dismissal for reasons beyond the employer’s control is valid for up to 60 days in a year (Labour Law, Art. 50), However, Defence Order No. 6 only covers April 2020 (the Defence Order and the Instructions issued pursuant thereto are to be reviewed on a monthly basis or whenever required by the Authority, pursuant to communications issued by the Prime Minister for this purpose).  (Defence Order No. 6 (2020) issued in accordance with Defence Law No. 13 of 1992; MoL Q&A Guide for Defence Order No. 6)

What are the legal requirements for payment of benefits (e.g. social/health insurance) by employers during work stoppage/temporary shutdown?

Under Defence Order No. 1, in the private sector;

During March, April and May 2020, enterprises can suspend payments into the old age insurance, while continuing to pay contributions for disability, death, maternity and unemployment insurances. In this case, the total Social Security contribution is 5.25% (of which workers’ contribution is 1%).

During these 3 months, workers have the option of continuing the old age insurance through voluntary contributions (17.5%).

(Jordanian; Social Security Law ¨No 1, (2014), Art. 59; Defence Order No. 1 (2020) issued in accordance with Defence Law No. 13 of 1992)

What are the legal requirements for payment of bonuses during work stoppage/temporary shutdown (e.g. festive bonuses)?

Under the Labour Law and Defence Order No.6, any payments of wages (including proportional payments) would be made in line with the definition of wages, which includes all cash or in-kind entitlements in addition to all other entitlements of whatever type, provided for by law, the work contract, CBA, or factory bylaw, or entitlements paid in practice, but does not include overtime wages. (Jordanian Labour Law, Arts. 2, 50; Defence Order No. 1 (2020) issued in accordance with Defence Law No. 13 of 1992)

What benefits does the government provide to workers (if any) during suspension in labour contracts?

Defence Order No. 6 prohibits employers from forcing workers to resign, or terminating their employment for reasons other than those permitted under the Order between March 18 and April 9, 2020.  The Order further provides than any workers who were forced to resign or who were terminated should return to work within one week from April 9, 2020, and requires employers to pay workers’ full wages for this period.

This excludes workers on fixed duration contracts that expired between March 18 and April 9, and probationary workers.

Any agreement by a worker to assign or waive any rights since March 18, 2020 is invalid and unenforceable. Employers must take necessary measures to cancel any such agreement within a week of the publication date of Defence Order No. 6 in the official Gazette (April 9, 2020).

In line with its capabilities, the government seeks to provide necessary support to secure essential needs for Jordanian daily workers who are not involved in social security, provided they will participate in social security according to a mechanism to be determined later.

(Defence Order No. 6 (2020) issued in accordance with Defence Law No. 13 of 1992; MoL Q&A Guide for Defence Order No. 6)

In addition, on April 19, the government issued Defence Order No. 9 to support the private sector in carrying out its obligations under Defence Order No. 6.  Order No. 9 includes the following programs:

I. Tadamun (Solidarity) Program (1):

1. Beneficiaries of this program include establishments that had full or partial work stoppages during April and /or May 2020, and whose workers are covered by the Social Security Law. They are identified in executive instructions issued by the Social Security Corporation (SSC).
2. To be eligible for a disbursement, workers must have been enrolled with SSC for at least 12 months and have been suspended from work.
3. Establishments must apply for a work suspension allowance no later than 31 May 2020.
4. SSC will cover 50% of the deductible wage of the insured worker, not less than JD 165 per month and not more than JD 500, on condition that the establishment pays SSC an amount equal to 20% of the deductible wage of the insured worker, not to exceed JD 250.
5. If the suspension allowance disbursed to the worker is less than the minimum wage or less than 50% of the worker’s wage, the company must make up the difference.

II. Tadamun (Solidarity) Program (2):

1. Beneficiaries of this program include establishments that had full or partial work stoppages during April and/ or May 2020, and whose workers are not covered by the Social Security Law. They are identified in executive instructions issued by the SSC.
2. Establishments applying to this Program must submit, no later than 31 May 2020, a request to cover all their workers under the work suspension insurance, as well as employers and those of similar status, e.g., managers, and pay a one-time fee of JD 140 for each worker to be included.
3. Employees insured in this manner will be covered by work suspension insurance only until 31 Dec. 2020. All employees should be covered by all insurance schemes as of 1 January 2021.
4. Establishments may apply for a work suspension allowance for workers who were suspended during April and/ or May 2020. The work suspension allowance for this program is JD 150 per month per worker, of which SSC pays JD 100, and the establishment pays JD 50 to SSC prior to disbursement.
5. Establishments may pay the one-time fee of JD 140 per worker in installments without interest on condition that the payments are fully settled by the end of 2022. SSC is authorized to identify necessary loan guarantees and collection procedures.
6. If the suspension allowance disbursed to the worker is less than the minimum wage or less than 50% of the worker’s wage, the company must make up the difference.

III. Musaned (Supporting) Program (1):

1. Beneficiaries of this program are persons covered under unemployment insurance who were terminated or suspended from work, after applying to the Joint Committee formed by the Ministers of Industry, Trade, and Supply and Labour.

2. Insured beneficiaries are eligible for up to 36 subscriptions.
3. Insured workers are required to submit a request for a work suspension allowance.
4. An amount equal to 50% of the worker’s deductible wage is disbursed to the worker, on condition that the amount is not less than JD 150 and not more than JD 350 per month, for a period of three months only.

IV. Musaned (Supporting) Program (2):

1. Beneficiaries of this program are insured Jordanians and non-Jordanians residing in the Kingdom.
2. SSC will issue instructions setting out conditions for this program.
3. Workers can submit a request to withdraw the balance in their unemployment insurance account.
4. Amounts disbursed to beneficiaries are based on percentages identified in executive instructions to be issued by SSC for this purpose, up to a maximum of JD 450 over a 3-month period.

V. Musaned (Supporting) Program (3):

1. Beneficiaries of this program are SSC subscribers whose last deductible salary does not exceed JD 500.
2. Beneficiaries subscribe to be insured by SSC for12 months minimum. Subscribers must pay their subscription dues in full.
3. Insured beneficiaries and mandatory subscribers who are not currently covered in provisions of the Law.
4. Workers must submit a request in order to receive a disbursement from their SSC account.
5. Amounts disbursed to beneficiaries cannot exceed 5% of their deductible wage, up to JD 450 maximum over 3 months, in accordance with conditions stipulated in executive instructions issued by SSC.

(Defence Orders No. 6 & 9 (2020) issued in accordance with Defence Law No. 13 of 1992; MoL Q&A Guide for Defence Order No. 6)

What are the legal provisions regarding workers taking paid or unpaid leave during work stoppage/temporary shutdown?

Defence Order No. 6 suspended some articles in the Jordanian Labour Law. However, the articles related to paid or unpaid leave remain the same, for example (not all types of leave are listed):

Annual Leave: Workers are entitled to 14 working days of fully paid annual leave unless additional paid leave is agreed to by workers and the employer.  If workers have worked for the employer for more than 5 years, they are entitled to 21 working days of fully paid annual leave. Holidays and weekly rest days do not count as part of annual leave even if they fall during the leave. If workers’ period of service is less than a year, they are entitled to paid leave calculated in proportion to the period of employment for that year.

The employer should calculate the annual leave by including the in-kind payment. (Labour Law, as amended by Law No. 14/2019, Art. 61; CBA between J-GATE, AOFWG and GTUWTGCI, effective as of 1 November 2019, Art 6(D))

Workers are entitled to 14 days of paid leave per year if they enroll in a labour education course approved by the Ministry or the General Federation of Trade Unions, upon nomination by the employer or manager in cooperation with the concerned association. (Labour Law, as amended by Law No. 14/2019, Art. 66(A)(1))

Workers are entitled to 4 months of unpaid leave if they enroll in an officially recognized university, institute or college.  (Labour Law, Art. 66(B))

Women are entitled to 10 weeks of fully paid maternity leave, and they can take up to one year off in addition (unpaid) to care for their children. (Labour Law, Arts. 67, 70)

If a worker’s spouse moves to work in another governorate or overseas, the worker can take up to 2 years of unpaid leave to accompany them. . (Labour Law, Art. 68)

What are the legal requirements for Sick Leave arrangements (paid or unpaid)?

Defence Order No. 6 did not suspend the provisions related to sick leave arrangements, so workers are entitled to 14 days of paid sick leave, based on a report from a doctor approved by the factory. Workers get an additional 14 days of paid sick leave if they are hospitalized, or on the basis of a report issued by a medical committee approved by the factory. (Labour Law, as amended by Law No. 14/2019, Art. 65)

What are the legal requirements for Annual Leave arrangements (paid or unpaid)?

Defence Order No. 6 did not suspend the provisions related to annual leave arrangements, so workers are entitled to 14 working days of fully paid annual leave unless additional paid leave is agreed to by workers and the employer.  If workers have worked for the employer for more than 5 years, they are entitled to 21 working days of fully paid annual leave. Holidays and weekly rest days do not count as part of annual leave even if they fall during the leave. If workers’ period of service is less than a year, they are entitled to paid leave calculated in proportion to the period of employment for that year. (Labour Law, as amended by Law No. 14/2019, Art. 61; CBA between J-GATE, AOFWG and GTUWTGCI, effective as of 1 November 2019, Art 6(D)).

What are the legally permitted deferments or exemptions for statutory contributions (e.g. health/social insurance etc) for either employer or workers?

-Before March 18:

According to the Social Security Law, social security contribution rates are 7.5% for workers, and 14.25% for employers. (Social Security Law No. 1 of 2014)

– After March 18

Defence Order No. 1 of 2020 suspends some provisions of the Social Security Law and replaces them with the Order. In order to support the private sector and maintain income security for workers, the Order allows companies to suspend payments into the old age insurance, while continuing to pay contributions for disability, death, maternity and unemployment insurances, thereby reducing the mandatory payment of 21.75% on each staff member to 5.25% (of which workers pay 1%). During these 3 months, workers have the option of continuing the old age insurance through voluntary contributions (17.5%).

(Jordanian; Social Security Law ¨No 1, (2014), Art. 59; Defence Order No. 1 (2020) issued in accordance with Defence Law No. 13 of 1992)

What are the legal requirements on severance (pay and notice)?

Previously, according to the Jordanian Labour Law,

Limited duration contracts:  If the employer terminates workers on limited duration contracts before the expiration of the contracts, workers are entitled to all the rights and benefits under the contract, including all outstanding wages owing for the remaining period of the contract.  (Jordanian Labour Law, Art. 26)

Unlimited duration contracts:  Workers employed under contracts of unlimited duration should be provided one month’s written notice before the termination. No notice is required for probationary workers, or for workers who (i) submitted false documents; (ii) failed to fulfil their contractual obligations; (iii) committed a fault that caused the employer considerable material damage; (iv) failed to observe the internal regulations after 2 written warnings; (v) had excessive unexcused absences; (vi) disclosed work secrets; (vii) were found guilty of a criminal offense; (viii) were drunk or under the influence of drugs during work; or who (ix) struck or insulted the employer, supervisor, or fellow worker. (Jordanian Labour Law, Arts. 23, 28, 35)

Valid reasons for termination relate to the conduct or performance of the worker, or the operational needs of the enterprise. Invalid reasons include (i) union membership or participation in union activities outside working hours, or during working hours with the employer’s consent; (ii) serving as a workers’ representative; (iii) filing a complaint or taking part in proceedings against the employer; (iv) the worker’s race, color, sex, marital status, family responsibilities, pregnancy, religion, political opinion, national extraction or social origin; (v) HIV-status; (vi) absence from work during maternity leave, annual leave, sick leave, workers’ education leave, pilgrimage leave, approved leave to perform union work, or leave to study at an approved institute, college or university; (vii) request by a worker for referral to a psychological healthcare specialist; or (viii) absence during service in the military or reserves. (Jordanian Labour Law, Arts. 21, 22, 24, 27, 97; CBA between J-GATE, AOFWG and GTUWTGCI, effective as of 1 November 2019, Art. 11)

Workers should not be terminated based on their conduct or performance without first having a chance to defend themselves, and they should be allowed help from another person when defending against claims that could result in termination.  However, these provisions do not apply in cases of terminations due to economic, technological or structural changes.  (Jordanian Labour Law, Art. 48)

Workers who are not covered by the Social Security Law should receive end of service payments equal to one month’s salary for every year they worked, and a pro-rata payment for fractions of a year.  End of service payments for workers normally paid minimum wage are calculated based on the last wage they received.  Piece rate workers’ payments are calculated based on the average monthly wage they received during the 12 months before they were terminated, or the average during their total period of service if they have not yet worked a full year.  Workers covered by special savings, pension or other funds should receive any allowances that they are entitled to from these funds. (Jordanian Labour Law, as amended by Law No. 14/2019,  Arts. 32, 33, 35)

Terminated workers can file a case at the labour court alleging arbitrary/illegal dismissal, and if successful, they may be awarded reinstatement or compensation in an amount equal to half a month’s wages for each year of employment (minimum 2 months of wages), plus notice pay, severance, etc. (Jordanian Labour Law, as amended by Law No. 14/2019, Art. 25)

All workers regardless of type of contract:

If workers’ service is terminated for any reason (including misconduct) before they have used their annual leave, they are entitled to payment for the unused leave days.

Unused annual leave should be paid based on the cash and in-kind payment in place at the time of termination and applied to all accumulated years of leave.  (Jordanian Labour Law, as amended by Law No. 14/2019, Art. 63)

Other entitlements may include return air ticket and any other benefits stated in the contract.

 During the Defence Order implementation:

According to the Q&A Guide issued by the MoL concerning Defence Order No. 6, workers whose services were terminated between March 18 –April 9, 2020) were required to return to work within three weeks from April 9, 2020, and employers were required to pay workers’ full wages for this period.

The Guide also states that employers can terminate workers who were still in their probationary period, as well as workers being dismissed for serious incidents of misconduct under Jordanian Labour Law, Art. 28 (a, g, h, i).

What are the legal requirements on resumption of work after a work stoppage (including OSH or overtime provisions)?

The Government of Jordan issued an OSH guideline (SOPs for large enterprises) to regulate the return to work.

– Economic sectors, corporations or entities seeking to resume operations must submit an application for permission to resume operations to the minister overseeing the relevant economic sector. Approved applications include National Epidemiology Committee conditions, if any, and the percentage of workers returning to work (after a phased approach, as of May 6, companies can fully re-open).  Companies returning to work must implement the standard operating procedures and the requirements set forth in the MOL Guide on working procedures for safety and health protection measures to reduce the spread of the Corona virus.  (Instruction No. (1) (2020) issued pursuant to Defense Order No. 6 (2020), Item 2(B) regarding procedures and conditions for obtaining approval for sectors, institutions and establishments to resume work)

What are the legal provisions on force majeure situations (if any) for wages, hours, benefits and/or severance?

Under Defence Order No. 6, workers working on premises are entitled to full wages. However, the employer may agree with the workers to reduce wages up to a maximum of 30%, provided that such reductions are also applied to the salaries of senior management. Overtime hours must be paid in line with the premiums required under the Labour Law (1.25% for normal OT and 1.5% for special OT).  (Labour Law, Arts. 50, 59; Defence Orders No.1, 6 (2020); MoL Q&A Guide for Defence Order No. 6)

The Labour Law provides that in case of force majeure, workers can be required to perform work that differs from the work they were hired to perform, so long as the work is within their capabilities, and limited to the force majeure situation.  (Labour Law, Art. 17)

What are the legal requirements for a company that closes down permanently as a result of Covid-19?

Outstanding wages are considered first priority debts. In case of liquidation or bankruptcy, workers should be paid one month’s wages as soon as the liquidator or the bankruptcy attorney seizes the employer’s assets.  (Labour Law, Art. 51)

What are the legal provisions for migrant workers and/or workers residing in dormitories during crisis?

In-kind benefits (food and housing) must be provided throughout the crisis, even if the employer has been granted permission not to pay wages during a suspension of operations. (Defence Order No. 6 (2020); MoL Q&A Guide for Defence Order No. 6)