Clearance and a release between the worker and the employer
The Law Office of Ali Barakat, from Baghdad, al-Yarmouk, sets out clearance and a release between the worker and the employer when the employment contract ends, under Labour Law No. 37 of 2015. The page stays with the clearance document required by article 41, and with what may not be waived of the rights in articles 14 and 61. It is not a tax clearance, and it is not a release vis-à-vis another withholding body.
The clearance document in article 41
The employer must give the worker a clearance document at the end of the employment contract, provided the worker has fulfilled all the obligations owed to the employer, under article 41, Second, (h). If the employer refuses, the worker may apply to the labour courts to compel the issue of the document required. The text ties delivery of the document to the worker's fulfilment of what is owed, and it opens the path to the Court of Labor if the employer then withholds it.
Alongside that document, the employer must give the worker a certificate at the end of the contract stating the date work began, the date it ended and the type of work performed, and the worker may ask for any particulars that match the truth to be added, under article 41, Second, (g). Documents and papers the worker deposited are also returned, under paragraph (f) of the same clause, unless their return would harm the employer. The certificate is a record of the period of service and the type of work; the clearance document records that the party has been discharged after fulfilment. Neither takes the place of the other, and neither takes the place of an account of wages or of the end-of-service gratuity if the right remains due under the statute.
When the contract ends, outstanding wages are to be completed from the day after the ending, and if the ending is by the worker the wages due must be paid within seven days of leaving work, under article 60. The end-of-service gratuity, when it is due, is read from articles 43 to 47 on the page End-of-service entitlements. A release of the other party is not read as a discharge of these entitlements while they remain due by force of law.
What a signature on a release does not extinguish
Article 14 provides that the rights set out in the Labour Law are a minimum of workers' rights, and that any condition in a contract or agreement by which the worker waives any right conferred by the provisions of this Law is void. A document the worker signs at the end of the relationship, under the heading of a clearance or a release, is therefore not enough to extinguish a wage, leave, a gratuity or compensation the Law confers, if the content of the document is a waiver of that right.
Any waiver of the wages due to the worker under the Law is void, under article 56. Article 61 requires a register of wages and overtime hours to be kept, and the employer is not discharged from the wage debt except by the worker's signature in the wage register. A signature in that register without reservation is not a waiver of any of the worker's rights. The signature is evidence of payment of what was recorded. It is not a waiver of a right that was not paid, or of a right that may not be waived. Any agreement by which the worker gives up the minimum paid annual leave, or waives it in return for compensation, is likewise void, under article 79.
The clearance document is therefore read together with what the wage register establishes, with the decision or agreement that ended the contract, and with whatever remains of leave, a gratuity or payment in lieu of notice. If the employer withholds the document after the worker has fulfilled the obligations owed, the path to compel it is the labour courts, under article 41. If a dispute arises over remaining rights, it is referred to the Department of Employment and Loans and then to the Court of Labor under articles 157 and 166, as on the page Ending an employment contract and the page Delayed wages and the worker's remedies.
What this document is not
Clearance between the worker and the employer under the Labour Law is not a tax clearance, nor a clearance certificate issued by a fiscal withholding body, nor a release vis-à-vis a social-security fund that takes the place of a contribution that has not been paid. Social-security enrolment is a path before the Department of Pension and Social Security for Workers under Law No. 18 of 2023, and an insured person's rights are read from that Law. The document the employer gives at the end of the contract does not of itself show a discharge vis-à-vis that Department, nor vis-à-vis the Directorate of Residence if the worker is not Iraqi.
The office follows a reading of these limits from Baghdad, al-Yarmouk.
Legal basis and sources
Frequently asked questions
When must the employer give a clearance document?
At the end of the employment contract, if the worker has fulfilled all the obligations owed to the employer, under article 41. If the employer refuses, the worker may apply to the Court of Labor to compel the issue of the document.
Does the worker's signature on a release at the end of the job extinguish the gratuity or unpaid wages?
No, if the content is a waiver of a right the Labour Law confers. Article 14 voids any condition or agreement by which the worker waives a right conferred by the Law, and article 56 voids a waiver of the wage due.
Is a signature in the wage register a final discharge of every right?
The employer is not discharged from the wage debt except by the worker's signature in the wage register, under article 61, but a signature without reservation is not a waiver of any of the worker's rights.
Is the clearance under the Labour Law a tax clearance?
No. This page stays with the clearance document between the worker and the employer under the Labour Law. It is not a tax clearance.
Related topics and articles
- 01When a job ends in Iraq: who ends it, on what ground, and what followsA practical map of ending a private-sector employment contract in Iraq: what ends it automatically, when the employer or the worker may end it, barred grounds, and the challenge deadline.
- 02End-of-service entitlements under Labour Law No. 37 of 2015The end-of-service gratuity under Labour Law 37/2015: the two-week formula, the statutory exceptions, and how it differs from benefits under Law 18/2023.
- 03When wages arrive late: the calendar the Labour Law sets and the path to recover themThe calendar for paying wages under articles 53 and 60 of Labour Law No. 37 of 2015, the rule that a waiver of wages due is void, and how a wage claim moves to the department and the Court of Labor.
- 04Which labour and social-security rules apply in the governorates and in the Kurdistan Region?The reach of Labour Law 37/2015 and Law 18/2023 in the governorates not organised in a region, and how work is organised in the Kurdistan Region.
- 05What is reviewed in the employment contract, a non-Iraqi's work permit, and social-security enrolment?What is reviewed in an employment file: the written contract, a non-Iraqi's work permit, and social-security enrolment,.