Labour Law And Social Security Law In Jordan

One of the main concerns that investors take into consideration

when they think of investing in a country is the labour market,

laws, and regulations that govern the relationship between the

Employer and the Employee.

Jordanian Labor law number (8) was issued in 1996 to regulate the

relationship between the Employer and the Employee, which means

that any contract or any term in any contract between both parties

that contradicts the labor law is considered invalid.

Along with labor law, social security law number 19 for the year

2001 is an applicable law in the relationship between both

parties.

The social security law was issued to guarantee employee pension,

disability, death and to cover the medical expenses and or/any harm

occurred to the employee during his duty and/or any career

illnesses.

To cover the abovementioned benefits listed in the Social Security

Law, 5.5 % of the employee's salary plus contribution from the

employer equivalent to 11% of the employers' monthly salaries

shall be deducted and paid to the social security department at the

beginning of every month, according to the employee list provided

to the social security department by the employer. These payments

shall be made within fifteen days after the end of each month; any

delay will make the employer liable for fines and interests.

Article (52) of the labor law gave the Cabinet the right to

formulate a committee from the employers, employees and Ministry of

Labor to study the minimum wages according to the market prices and

the economic situation. This committee determined the minimum wages

to be one hundred ten Jordanian Dinar per month instead of eighty

Jordanian Dinar starting from 1st June 2006 for all employees

excluding the workers in garment manufacturing, as they will enjoy

this increase starting from 1st January 2007. Newspapers mentioned

that new regulations may be issued regarding the minimum wages by

the beginning of 2009 but nothing official regarding the matter has

been confirmed.

Shape of employment contracts

Employment contracts can be limited or unlimited contracts. In

the case of limited contracts, if the employer terminates the

contract before the end of its duration for unlawful reason, then

the employee is entitled for compensation equivalent to his

salaries for the rest of the period, while in the unlimited

contracts the compensation will be between three – six

months plus one month notice, in other words the minimum

compensation will be four...