Termination of Employment in Saudi Arabia

March 9, 2012

This article will discuss what could happen to you if you find yourself victim of termination of employment in Saudi Arabia and where you would stand according to Saudi Labor Law and what you can do about it.

 

Saudi Labor Law

 

Pay and conditions agreed within your contract should be set in concrete and you are able to enforce them legally through Saudi Labor law and by taking your employer to the courts. If something is clearly stated in your contract (The Arabic version not the English or any other language version) then you will win and your employer will be made to make good by giving you whatever he owes you. If what is written is less than that demanded by Saudi Labor law then the higher requirement is the one that is enforced. You should have a copy of your official contract as it is required when you apply for your Saudi work Visa, most of the time it will be written in both Arabic and English but occasionally only in Arabic; either way you are unlikely to know what your true terms and conditions are unless you read Arabic.

However you hear many times about people not being paid their full wage, being denied holidays and other problems and that they have no way to complain. Why is this? Well many people do not know that they can complain or that they have a court to which they can take their employer or sponsor. Those that do know about Saudi Labor law; also know that if they do take their sponsor to court they could be in for a difficult and long wait.

 

Changes to Employment Contract in Saudi Arabia

 

Termination of Contract in Saudi ArabiaIn the last position that I held the company decided to cut everyone’s salary and benefits as cost saving during the economic crises. Most people did not agree but the company made it clear that this was not a negotiation and that it would be done with or without our agreement. A letter was then circulated stating the individuals reduction and asking them to sign to accept this change to their contract. Of course many people refused to sign, the HR manager then contacted each one that had not signed and informed them that the instruction from “head office” was to let go those that did not agree, which eventually got many more to sign. Only a handful never signed (including myself – more laziness than rebellion) but there was no further follow up, several months later when I spoke to the HR manager he had no idea that I had never signed! However the legality (confirmed by the companies own legal representative) was that the company had no way to enforce the change to our contracts, but to go to court would require us to pay for lawyers, and the case may take over a year to be heard. During this time we would not be able to work for another sponsor, leave the country, and would be at the mercy of our employer who could just then cause us many problems at work etc.

 

Termination of Contract in Saudi Arabia

 

The length of time that any case would take was reemphasized to me several months later when the company terminated the contacts of several expat workers to once again save money as well as comply with the laws regarding the number of Saudis they had to employ. Instead of offering payment to the end of contract which for most of those was several months, they only offered one months notice and limited benefits. Each was only given a couple of days to sign their paperwork and were told that failure to sign would cause the company to withhold payments. If they did not sign and wanted to go to labor court the company would do the following;

  • No wages or any other benefits would be paid.
  • No Transfer of sponsorship would be entertained and no letter of recommendation or letter of no objection for transfer would be given at the end of the case no matter what the outcome.
  • No exit visas would be allowed before the case was settled.

This would basically mean that if the case took an average amount of time in the labor court the individuals would have to spend over a year without wages (and benefits such as car, housing, and health insurance), unable to leave and unable to work for anyone else as you can only work for your sponsor. At the end of this time the person could almost guarantee that they would win their case however they would be unlikely to ever work for another Saudi company!

Most of  the expats being “professional” level employees; engineers and managers had little choice if they wanted to continue their careers within Saudi or wanted to not be stuck there for a year or more without wages, they had to accept the companies offer. Some tried to negotiate additional notice or benefits but only one person that I know of managed to get anything extra.

The behavior towards those terminated was downright hostile and threatening, I recorded one conversation where an employee was basically shouted at by the CEO of the company and told to sign or the offer would be reduced to nothing. The treatment of Expats by Saudis can be far from ideal, and in this case it was the worst I had ever been treated by anyone anywhere in the world.

 

Legal Advice in Saudi Arabia

 

I was one of those terminated, I left the office and sought legal advice as I should have had almost 9 months notice according to my contract and Saudi Labor Law and my initial offer was just one months payment and goodbye! I got a list of lawyers from the British Embassy and set off to see one with my contract and other paperwork that I had to show how terribly the company had been treating me and how it was violating my contract. The Lawyer that I saw was very sympathetic, took my paperwork, made many notes and told me that he would contact me the following morning with advice which at this stage would be free.  The following morning I went into the office to check through emails and apply for some more jobs and was called into the legal advisers office. He had all my paperwork that I had given to the lawyer the previous afternoon. The lawyer was on retainer to the company and just took everything I gave and said and gave it straight to the company without informing me! I could not believe how dishonest the guy could be to not tell me that he worked for my company and would do this! I was so angry, but what could I do?

I phoned around every lawyer on my list and found only two that said they were not already on paid retainer to the company. I spoke to one and he explained that I would 100% win my case but it could take up to 18 months and his fee would be just 15%, paid in advance. This would have taken all of the cash that was available to me as the company would freeze any payments once I initiated any action. I asked if he would accept payment when we won the case if he was 100% confident but he refused.

 

Negotiating a Settlement in Saudi Arabia

 

By the end of that afternoon I had a promise of a job from a fellow expat who held a very senior position in another well known company. So I decided to bluff the company into thinking I would go all of the way to court and see what they would do. The legal director had been very friendly thinking that I believed he was on my side so I went to see him and told him my plans to take the company to court, that I would feed various bits of information back to head office and various other threats and asked his advice knowing that as soon as I left he would tell the CEO..

The HR manager gave me a revised offer the following morning which increased my offer by an additional 150% but I would have to sign “today.” I thought that was very quick and easy so decided to push for more through the CEO. (The CEO who had spent the previous three months having me map out a new structure for the company, creating a new position for myself and doing reports on how to improve company efficiencies!) I met with him and explained that with a pregnant wife I felt that I needed a better offer to tide me over while I looked around for a new job as they were difficult to get (I now had two job offers.) The CEO totally lost it, told me in no uncertain terms that as far as he was concerned the offer will be returned to just one months notice and if I did not accept one months notice then I can go to court if I wanted! Wow, Saudi compassion in action!

I refused to sign and stayed away from the office for two days telling people that I knew would feedback what I said that I was developing my case with my lawyer. On the third day I had an offer letter for one of the jobs so went back into the office to see what was happening, after all I would need the companies permission to change sponsorship.

The HR manager informed me that they thought they could get the CEO to still go with the increased package if I were to agree today. I said that I would consider it seriously but wanted to ensure that once I agreed that I would be able to remain in the kingdom until the end of my current Iqama and the company would transfer my sponsorship quickly and without problem when I finally found a new position,and I would need all this in writing in English and Arabic signed by the CEO. This was agreed fairly quickly so I accepted the revised offer knowing that the new company wanted me to start in 4 weeks time.

At this point I want to revisit a small comment I made above, I had known for some time that the company was to make cuts, I had actually pointed out that it was overstaffed by around 40% to 50% and showed how things could be reorganized around a new structure that would be better focused on the customer and more efficient for the company also. The CEO had had me working on this for three months with myself taking a key role, then he put the knife in my back when I had fully delivered how things should be reorganized placing a friend and Saudi in the role that I had developed for myself to take to help push the company forward. Do not trust anyone in Saudi Arabia, I have had many promise things but few deliver. Most will claim to be your friend and encourage you to speak your mind but then pass on what you have to say, office politics can be very venomous in KSA.

My Friend who I mentioned earlier in this story that had offered me a position was sacked along with every other western expat in the group he worked in shortly after he had made the offer, if I had relied on just his job offer I would have had no job to go to after this one.

If you find your employment terminated in Saudi Arabia I hope you are one of the lucky ones who gets paid all of their benefits without problem rather than be the victim of bullying and blackmail as I was.

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13 Responses to Termination of Employment in Saudi Arabia

  1. irfaan harris
    May 30, 2012 at 2:42 pm

    I have first hand experience in this matter – and feel free to contact me.
    1. your contract with your company is the contract that the courts will use.
    Court case took 2.5 years
    I lost.
    Lawyer cost me SAR30,000
    it is YOUR responsibility to make sure you WORK permit is in order (IQAMA is not a work permit it is a residence permit)
    taking your employer to court is not easy .
    Ask yourself: where do you start…..

    • admin
      June 3, 2012 at 2:01 pm

      Hi Irfaan,
      Sorry to hear of your problems, this is why I took what I could get and did not bother to take them to court. I know a few people who have taken companies to court over unpaid salaries and they have won, but the cases have all taken over a year and they were very obvious cases to rule. In general in any official dealings it tends to be the Saudi that is favored in most cases.

    • Ahamed
      December 31, 2012 at 2:29 pm

      i need a advice on changing sponsorship, i am working with a company since 5 years (i was not in their visa while entering this firm)now i got a very good job offer. If my present company not allow me to go out saying that they will not give me the transfer then what I have to do

      • admin
        January 25, 2013 at 7:57 pm

        Hi Ahmed,

        You cannot force your sponsor to give you a transfer and I guess if you quit they will also not provide you with a no-objection letter allowing you to work for someone else. You are pretty stuck unless you quit and try to return with a new sponsor, but you may have to wait a full year.

  2. Imran Ahmed
    September 3, 2012 at 1:31 pm

    Assalamu Alaikum,

    I was appointed as an Administration Officer in November 2012 and since then I have been working in the company happily. But in the month of July, company transferred me to sales department to work as a sales executive. I don’t have any knowledge about sales but my boss talked to me very rudely and told me that He can put me in any position according to the Saudi labor Law and no one can stop him to do so. He is even refusing me the transportation service and i have to walk 8 km daily in the hot sun that has caused me health problems. Please help me to get rid of him. Jazakallah

    • admin
      September 14, 2012 at 1:53 pm

      Hi Imran
      I suggest that you contact your home embassy for some advice as to what you can do with regards to your situation. As far as I am aware they cannot make you work in a role that you are not suited for especially as your Iqama will state what job you should be doing. You can download a copy of Saudi Labor law in various languages if you do a quick search on google and have a quick search for yourself as to what the rules are that apply to you.

  3. September 13, 2012 at 9:56 pm

    I want to Saudi Arabia work visa.

  4. rachel
    December 17, 2012 at 5:48 pm

    My contract is about to end this March.How many months from now would you advise me to send my demand letter to the employer ?Thank you.

    • admin
      December 23, 2012 at 2:52 pm

      With the speed at which most Saudi companies move I would advice sending anything as soon as possible – three months will just about give the time to open the letter and read it..

  5. Michael Calicdan Quias
    January 2, 2013 at 2:19 pm

    Dear Sir/Madam,

    I’m a Expat-Filipino(nationality), in turning 1 year next month February 2013 in such a reason no increasing from salary and my question is this. I’m planning to resign on my company this year and just waiting for my Iqama Permit residency expired this month of May 2013, Is there any possible will my company share with me a half of the total for my airfare or it will be shoulder by myself? And, also In my situation now i already finish my first 1year and 1 more year to go before my contract ends but now I’m terminating/breaking my contract. So, is there any suggestion or advise.Please, and thank you.
    Hoping for your as soon as possible comments..

    • admin
      January 25, 2013 at 8:01 pm

      Hi Michael

      You cannot leave the country without an exit visa through your company so they pretty much have full control over you at the moment. If you want to quit before the end of your contract then it is likely that your employ will either insist that you remain or they will request that you refund all of the recruitment and other costs. Of course you may be lucky and have a very understanding employer who will just let you leave.

      What most people do is they ask for an exit visa for a vacation or even a weekend trip to Dubai with friends, pay their own flight and do not return. However if you do this you will not be able to find a new sponsor for one year.

  6. Lenimar
    January 23, 2013 at 3:00 am

    My husband is presently working in company in Ryadh,I just want to know if what is the rule for the exit or going for vacation,because his company dont allow him to go for vacation for this coming February which is the end f his fourth year contract already,he take a vacation June 2011 and go back at work August 2011..What I want to know is does he really need to wait for August so he could go for vacation again as what his boss told him so?..cause they told him that they must be based on the date when he got back for vaction to complete for 2 years.

    • admin
      January 25, 2013 at 8:12 pm

      Hi Lenimar

      It depends what your husband has agreed within his contract. He will need to discuss with his sponsor but to be honest the company holds all of the power in these cases!

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