Saudi: Companies May Reduce Salary or Send Staff on Leave

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The Ministry of Human Resources and Social Development has issued a decision to regulate the contractual relationship between workers and employers as part of the Kingdom’s efforts to limit the impacts of the novel coronavirus pandemic.

According to the decision, once the government has taken measures to deal with a certain case or circumstance necessitating reducing working hours, or taking precautionary measures to prevent the aggravation of that case or situation, then the ministry permits considering this condition or circumstance as a force majeure, as stipulated in Paragraph 5 of Article 74 of the Labor Law.

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Once force majeure takes effect, the ministry allows the employer to, first of all, agree with the employee, within six months to reduce the worker’s salary to be commensurate with his actual working hours, or the worker can be granted a local leave that will be counted within his entitled annual leave balance, or the worker can be granted an exceptional leave, in line with Article 116 of the Labor Law.

After that, terminating the work contract is illegal if it is proved that the employer benefited from any support from the state to deal with the situation. Additionally, the worker reserves the right to terminate the work contract.

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The ministry has allowed the possibility of benefiting temporarily from the services of the surplus expatriate workers via “Ajeer” portal, as an alternative for recruiting workers from abroad.

By this decision, the ministry aims to protect workers during such circumstances from being terminated or losing their contractual benefits. The portal will soon offer the businesses to publish names of their excess workers.


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