Light in Darkness: Workers’ Wages in the Event of Work Stoppage in the Project

Workers’ Wages in the Event of Work Stoppage in the Project

Through Article (72) of Labour Law No. 37 of 2015, the Iraqi legislator sought to guarantee the worker’s source of livelihood during the period of unemployment by establishing the worker’s right to wages, so that they may be able to meet the requirements of life. This is because the worker’s wage is, in most cases, their only source of income, in addition to the fact that their unemployment is attributed to a cause beyond their control. This rule is regarded as consistent with the principles of justice on the one hand, conducive to the stability of labour relations on the other hand, and constitutive of a new safeguard for wages on a third hand.

In the text of Article (72), the Iraqi legislator sought to rely on a theory specific to this situation, apart from the rules of civil law, known as the theory of risk allocation. Under this theory, the risks arising from the stoppage of work in the project are distributed in such a way that each party bears the risks falling within the scope of its activity. Thus, the employer bears responsibility for all incidents affecting the project and leading to its stoppage if such causes fall within the scope of the employer’s activity, while the workers bear part of the responsibility through the possibility of assigning them unpaid additional working hours for a specified period.

First Requirement: Work Stoppage Resulting from Exceptional Circumstances or Force Majeure

If work in the project stops, wholly or partially, due to general exceptional circumstances or force majeure, such as wars, security disturbances, natural disasters, or administrative decisions preventing the continuation of the activity, the Iraqi legislator arranged a consequence in accordance with the protective nature of Labour Law No. 37 of 2015 in favour of the worker. The employer is required to pay the workers’ wages for the period of stoppage, up to a maximum of thirty days, on the basis that the unemployment in this case is not attributable to any fault or negligence on the part of the worker, but rather to a cause beyond their control.
At the same time, and in order to achieve balance and not burden the employer with the full consequences of the stoppage without consideration, the legislator permitted the employer, during the stoppage period, to assign the worker to other work different from the agreed work, provided that it is similar to it. The legislator also permitted assigning the worker unpaid additional work as compensation for the lost time, provided that such additional work does not exceed two hours per day and a maximum of thirty days per year.
The worker’s refusal to carry out a lawful assignment in this case is deemed a breach of the principle of good faith, which requires the two parties to the employment relationship to cooperate when emergency circumstances arise that threaten the operation of the project, especially since the legislator has guaranteed the worker’s wages during the stoppage within a specified ceiling. Upon the cessation of the exceptional circumstance or force majeure, the worker must be reinstated to their original work.
In practical reality, and in light of our extensive experience in labour and social security affairs and our dealings with major foreign and Arab investment companies, the proper application of Article (72) of Labour Law No. (37) of 2015 requires the employer to issue a written warning/notice to the project’s workers for a period of thirty (30) days, indicating that it has been decided to stop the project wholly or partially due to exceptional circumstances or force majeure, while expressly confirming the employer’s commitment to pay the workers’ wages for the period of stoppage up to thirty days in implementation of the aforementioned text.
In parallel, the employer must take the proper administrative measure by submitting an official request to the Inspection Department at the Ministry of Labour and Social Affairs to establish the fact of the stoppage and regulate its consequences, and to request the suspension/interruption of employment contracts in due legal form in accordance with the approved procedures, in a manner that ensures documenting the reason for the stoppage, determining its duration and its effects on wages and labour rights, and reducing the risks of future disputes or allegations of unlawful termination of the employment relationship.

Second Requirement: Work Stoppage Caused by the Employer

Work in the project may stop without the employer’s intention due to difficulties that do not reach the level of force majeure in its strict sense, as the employer may be able to foresee them, and they do not result in absolute impossibility, but rather in disruption in the operation of the project. These causes include all economic and technical difficulties.

Although such difficulties, as a general rule, are not regarded as force majeure, they may be described as such when they exceed the ordinary limits of expectations and truly take on an exceptional form. For example, a shortage of raw materials in the market causing instability in their supply is not considered force majeure for the employer.

However, if a war or a flood causes the roads through which those materials reach the project to be cut off, then the shortage in this case is considered to have arisen from force majeure, as in the case of war between Iran and the United States of America, which affected the Middle East, including Iraq, and what resulted from the closure of the Strait of Hormuz, which constitutes the maritime passageway for the Arab states, leading to the interruption of the passage of ships transporting materials and other goods, as well as the suspension of oil transport, which represents 90% of Iraq’s revenues, thereby negatively affecting the country, in addition to bombardment affecting Arab states including Iraq, road closures, and many other effects that are regarded as force majeure.

The Legal Penalty for Violating the Provisions on Working Hours

The Iraqi legislator stipulated in Article (73) of the Labour Law that an employer who violates the provisions of Chapter Eight relating to working hours shall be punished with a fine of not less than two hundred and fifty thousand dinars and not more than five hundred thousand dinars, and the fine shall be multiplied according to the number of workers in respect of whom the violation occurred.

Among the forms of violations for which the employer is punished under this text are:

Increasing the daily working hours beyond eight hours per day or forty-eight hours per week, except in the exceptional cases provided for by law.
Failing to provide the worker’s working hours with one or more rest periods, the total of which shall not be less than half an hour and not more than one hour.

This penalty is regarded as one of the important safeguards established by the legislator to protect workers’ rights and ensure employers’ compliance with the legal limits of working hours, as the multiplication of the fine according to the number of affected workers makes the penalty deterrent and proportionate to the scale of the violation.

Termination of the Employment Contract Force Majeure under Iraqi Labour Law No. (37) of 2015

Article (43/First) of Iraqi Labour Law No. (37) of 2015 provides that the employment contract shall end in the event of force majeure. It is understood from this text that the legislator established a special cause for the termination of the employment contract that does not result from either party to the employment relationship breaching its obligations, but rather from an exceptional external circumstance for which the worker or the employer is not responsible, since force majeure is considered an external cause that breaks the causal link and makes the performance of obligations impossible.

First Requirement: The Legal Basis for the Termination of the Employment Contract by Force Majeure

The rule set out in Article (43/First/ṭā’) is consistent with the general rules in Iraqi civil law, which we discussed in the first chapter, since the basic principle is that impossibility of performance due to force majeure leads to the automatic dissolution of the contract by operation of law, because the subject matter of the obligation becomes completely and permanently incapable of performance. Consequently, the contractual relationship ceases without the need for notice or a constitutive judicial judgment, so long as the impossibility is proven and its conditions are satisfied.

On this basis, if it becomes impossible for one of the parties to the employment contract to perform its obligation due to force majeure—such that continuation of the contract’s performance becomes impossible—the contract terminates by operation of law, not as a penalty for default, but as an objective effect of impossibility.

Second Requirement: The Effect of the Termination of the Employment Contract by Force Majeure in Fixed-Term Contracts

The employment contract is distinguished by being a contract of duration. Therefore, its termination by force majeure does not operate retroactively to the date of its conclusion, but rather takes effect from the date on which the final impossibility occurs. This is because contracts of duration are excluded from the principle of retroactive effect, since what has already been performed under the contract before the impossibility has been realised and has produced its effects, and there is no place for restitution.

Accordingly, if the employment contract is dissolved due to force majeure:

The termination takes effect from the date the impossibility occurs, not from the date the contract was concluded.
No compensation arises for the remaining term if the contract is for a fixed term, nor compensation for the notice period if it is for an indefinite term, because the termination here does not result from fault by either party, but from an external cause beyond their control.

Third Requirement: Distinguishing between Final Impossibility and Temporary Impossibility and the Effect of Each

The impossibility that leads to the termination of the employment contract by operation of law is final impossibility, which permanently eliminates the possibility of performance. As for temporary impossibility, it does not lead to the dissolution of the contract; rather, it results in the suspension of the contract’s performance for the duration of the impediment, provided that the contract returns to performance upon the cessation of the impossibility and the restoration of the ability to perform, in accordance with the provisions of Article 72 of Labour Law No. 37 of 2015.

It follows that the criterion for termination or suspension is determined by the permanence of the impediment:

If the impediment is final: the contract terminates.
If the impediment is temporary: the contract is suspended and the employment relationship continues until the cause ceases.

Fourth Requirement: Forms of Impossibility of Performance in the Employment Contract Due to Force Majeure

The impossibility preventing the performance of the employment contract due to force majeure may arise on the worker’s side or on the employer’s side, depending on the nature of the event:

On the worker’s side: such as an illness or total incapacity preventing the worker from performing the work permanently.
On the employer’s or project’s side: such as an earthquake or a comprehensive fire leading to the destruction of the project and the impossibility of its continuation, or the issuance of a governmental decision permanently prohibiting the employer from carrying on the activity or preventing the importation of raw materials in a manner leading to the permanent stoppage of the project, or the occurrence of a state of war that affects the project.

Although the legislator has established force majeure as one of the causes for the termination of the contract, the provisions of Article (72) must nevertheless be taken into account when work stops due to force majeure. Thus, although Article (43/First/ṭā’) provided for the termination of the employment contract in the event of force majeure, its application is not separate from the rule of Article (72) of the same Labour Law, which regulates the worker’s wages in the event of work stoppage due to exceptional circumstances or force majeure and establishes a legislative balance between protecting the worker’s wages and the employer’s interest in managing the effects of the stoppage.

Article (72), in brief, provides as follows:

First: If work stops wholly or partially as a result of exceptional circumstances or force majeure, the employer is obliged to pay the workers’ wages for the period of stoppage up to thirty (30) days. The employer may assign the worker similar work or unpaid additional work as compensation for the lost time, provided that it does not exceed two hours per day and a maximum of thirty days per year.
Second: If the stoppage of work is caused by the employer, the employer must pay the workers’ wages in full for the period of stoppage, and may have the worker perform paid additional work within the prescribed limits.

Accordingly, the termination of the employment contract due to force majeure under Article (43/First/ṭā’) should not be understood in isolation from the nature of the work stoppage:

If the force majeure causes a temporary stoppage, then the requirement is to apply Article (72) as a special regulation governing suspension and the wage rights during such suspension.
If the force majeure has reached the level of final impossibility that renders the continuation of the employment relationship impossible, then the rule tends toward the termination of the contract under Article (43/First/ṭā’), while taking into account the worker’s accrued rights for the preceding period and their rights arising from the end of service in accordance with the relevant legal frameworks.

Thus, it becomes clear that the Iraqi legislator did not make force majeure an automatic cause for depriving the worker of their rights. Rather, the legislator adopted a graduated legislative approach: suspension with a guaranteed limited wage in the case of temporary stoppage, and termination in the case of final impossibility, in a manner consistent with the particular nature of the employment contract, its social character, and the objectives of labour law in protecting the worker and regulating the stability of labour relations.

Conclusion

In conclusion, it is clear from the foregoing discussion that force majeure, although originally a general theory based on the concept of an external cause in civil law, acquires a clear specificity in the field of the employment contract, imposed by the protective nature of Iraqi labour law. The study has shown that the legislator did not leave the effects of exceptional incidents—including wars and the resulting disruption of projects, disturbance of supply chains, and closure of roads and crossings—subject only to the rules of civil law. Rather, the legislator established a special regulation that balances the continuity of the worker’s source of livelihood against protecting the project from collapse.

The analysis of the provisions of Labour Law No. (37) of 2015 demonstrated that wage protection is not based merely on humanitarian considerations, but on precise legislative rules. Article (40) established a legal presumption under which the worker’s attendance and readiness are deemed equivalent to performance of work whenever the impediment arises from a cause beyond the worker’s control, including external causes that may amount to force majeure.

Articles (71) and (72) also showed that the legislator addressed exceptional circumstances through the logic of regulating risks and distributing their effects. Thus, the law permitted a controlled departure from the maximum limit of working hours in cases of necessity and recognised the worker’s right to wages when the project stops for a certain period, while allowing specific mechanisms for compensating lost time within legal ceilings that do not undermine the essence of the worker’s right.

Accordingly, the principal conclusion reached by this study is that the effect of force majeure on the employment contract in Iraqi legislation should not be understood as an absolute exemption or an automatic extinguishment of rights and obligations. Rather, it constitutes a regulatory legal framework administered through special rules aimed at:

Preserving wages as a subsistence right.
Ensuring the continuation and stability of the employment relationship whenever possible.
Enabling the employer to overcome the crisis within calculated limits.
Imposing deterrent sanctions when those limits are exceeded or abused.

In this way, the function of labour law as a social legislation that gives priority to the principle of worker protection is affirmed, without neglecting the requirements of operating the project and ensuring its continuity. This is what makes the study of force majeure in this field of increasing practical importance, especially in environments where crises and exceptional circumstances frequently recur.

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