faq saudi labor law by attychavez phl embassy riyadh

W e b s i t e : h t t p : / / w w w . p h i l e m b a s s y -‐ r i y a d h . o r g

Frequently Asked Questions Saudi Labor Law Philippine Embassy in Riyadh Atty. Cesar L. Chavez, Jr. (POLO-‐OWWA) 2011

08 Fall

Embassy of the Republic of the Philippines Riyadh, Kingdom of Saudi Arabia

W e b s i t e : h t t p : / / w w w . p h i l e m b a s s y - r i y a d h . o r g of 21

FAQs on SAUDI LABOR LAW (By: Atty. Cesar L. Chavez, Jr. - Welfare Officer,

Philippine Embassy POLO-OWWA)

Q1 What is the instrument that will govern the employment of OFWs in the Kingdom of Saudi Arabia?

A: The Work or Employment Contract signed by the worker and the employer. However, stipulation that contradicts the Saudi Labor Law (SLL) including release & settlement of worker’s right unless more beneficial to the worker is null and void (Art. 8, SLL).

Q2 What is a “Work Contract”?

A: A Work Contract is a contract concluded between an employer and a worker, whereby the latter undertakes to work under the management or supervision of the former for a wage (Art. 50, SLL)

The Work Contract for Non-Saudis shall be written and of specified period. Otherwise, the duration of the work permit shall be deemed as the duration of the contract. (Art. 37, SLL)

Q3 What is the new Saudi Labor Law?

A: It is Royal Decree No. M/51 dated 23 Sha’ban 1426/ 27 September 2005 which took effect 180 days thereafter (or on 27 March 2006).


Q4 Who are covered by the Saudi Labor Law?

A: All workers except: (Art. 7, SLL)

1) The employer’s family member, namely, the spouse, the ascendants and descendants who constitute the only workers of the firm.

2) Domestic helpers and the like.

3) Sea workers working on board vessels with a load of less than 500 tons.

4) Workers of agricultural and pastoral firms that employ less than 10 workers, or do not process their own products, or do not operate or repair agricultural machineries on a permanent basis.

5) Non-Saudi workers entering the Kingdom to perform a specific task for a period not exceeding two months.

6) Players and coaches of sport clubs and federations.

Q5 Are family drivers considered as “domestic helpers”?

A: Yes. Drivers hired in the employ of a family or household are considered as domestic or household workers and hence, are not covered by Saudi Labor Law. This holds true in the case of other workers falling under the category of household workers, such as gardeners and cook in the employ of a family.

Q6 Since this category of workers is not covered by the Saudi Labor Law, where can they seek remedies?

A: Female domestic workers can seek assistance and refuge at the nearest Saudi Welfare Office, “Maktabut Tasawul”, (or Office for Domestic Workers Affairs), either directly or through the assistance or endorsement of the Embassy/POLO. For

family drivers and other male household workers, they can seek assistance or remedies at the office of the Governor or at the Civil Rights Office (“Qismul Huquq”) as the case may be.

WORK RELATIONS

Q7 What will govern the relation between the employer and the worker?

A: The provisions of the Work Contract shall determine the relations between the employer and the employee, including their rights and obligations, to the extent that they are not inconsistent with, or contradictory to applicable laws, morals, public policy, customs and regulations.

In the absence of a written contract, the rights and obligations of the parties shall be determined by law, and the existence of an employer-employee relationship may be “established by all means of proof” where the worker can assert his rights.

Q8 What is probationary period of employment under the Saudi Labor Law?

A: Probationary period of employment is not required under the Saudi Labor Law. However, if the worker is subject to a probationary period the same shall be expressly stated and clearly indicated in the Work Contract. Such probationary period shall not exceed 90 days exclusive of Eid-al Fitr and Eid al Adha holidays and sick leaves. Each party shall have the right to terminate the contract during this period, unless the contract embodies a


clause giving the right to terminate the contract to only one of them. (Art. 53, SLL)

Q9 Can the worker be placed on probation more than once by the same employer?

A: Yes, if it involves another profession or work and the contracting parties agreed thereto. If the contract is terminated during the probationary period, neither party shall be entitled to compensation nor shall the worker be entitled to an end of service award. (Art. 54, SLL)

Q10 Can a Work Contract validly contain provisions below the minimum standards provided by applicable law or regulations?

A: No. While it is true that a work contract is consensual in nature where the parties may agree on its terms and conditions, it cannot freely stipulate provisions, which are contrary to applicable laws and regulations. Thus, a work contract, being impressed with public interest, should not contain provisions short of, or below the minimum standards set forth under the Saudi Labor Law. But the parties may however agree on a higher set of standards, privileges or benefits favorable to the worker.

The Saudi Labor Law provides that “any condition that contradicts the provisions of this Law shall be deemed null and void. The same applies to any release or settlement of the worker’s right arising from the said Law during the validity of the Work Contract, unless the same is more beneficial to the worker. (Art. 8, SLL)

CONTRACT SUBSTITUTION

Q11 What is Contract Substitution?

A: Contract substitution refers to the practice whereby workers are made to execute or sign a new contract different from the original one agreed upon by the parties.

Q12 Is contract substitution allowed?

A: Generally, a contract or agreement is defined as the meeting of minds of parties concerned to do or not to do a specific thing. Being consensual in nature, the parties are free to stipulate on the conditions thereof provided they are not contrary to law, customs, moral or public policy.

The parties to a contract may therefore agree, by mutual consent, to change, amend, alter, or revise, in whole or in part, the terms and conditions of their agreement as may be allowed by law.

Q13 When contract substitution is considered illegal?

A: A contract or document cannot be as such per se without the consent of the other party freely or voluntarily given, be it the employer or the worker. Hence, if the worker’s consent or signature to the contract was taken by force or under duress, deceit, fraud or other means that vitiates consent, the contract is deemed invalid or void ab initio.

A substituted contract is also deemed null and void, in whole or in a part, if the terms and conditions thereof are contrary to law, even if the worker has voluntarily given his consent thereto. (Art. 8, SLL)

Q14 Can employer require the worker to perform a work different from the


agreed work or functions in the contact?

A: A worker may not be assigned to duties which are essentially different from the work agreed upon without his written consent, except in cases of necessity dictated by transient circumstances for a period not exceeding thirty days a year. (Art. 60, SLL)

Q15 Can the employer unilaterally reduce the salaries of the worker during the contract period?

A: It is illegal for the employer to reduce the salaries of workers with no valid or justifiable reasons during the contract period and without the worker’s consent.

WORKER’S DUTIES

Q16 What are the duties of the workers under the Saudi Labor Law?

A: In addition to the duties provided for in the SLL and the regulations and decisions in the implementation thereof, the worker shall be required to:

a. Perform the work in accordance with the trade practice and the employer’s instructions provided that such instructions do not conflict with the contract, the law on public morality, and that they do not expose him to any undue hazards.

b. Take care of the employer’s machinery, tools, supplies and raw materials placed at his disposal in his custody and return to the employer the unused materials.

c. Abide by the proper conduct and ethical norms during the work.

d. Extend all assistance and help without making it contingent on additional pay in case of disasters or hazards threatening the workplace or the persons working therein.

e. Undergo, at the employer’s request, the medical examinations required prior to or during employment to ensure that he is free from occupational or communicable diseases.

f. Keep confidential the technical, trade and industrial secrets of the products on which he directly or indirectly contributed to their production, as well as all trade secrets related to the work or the firm, the disclosure of which is likely to cause damage to the employer’s interest. (Art. 65, SLL)

EMPLOYERS’ DUTIES

Q17 What are the duties of the employer under the Saudi Labor Law?

A: In addition to the duties provided for in this Law and the regulations and decisions issued for its implementation, the employer shall be required to:

a. Refrain from using the worker without pay and shall not, without judicial instrument, withhold the worker’s wages or any part thereof. The employer shall treat his workers with due respect and refrain from any action or utterances that may infringe upon their dignity and religion.


b. Give the workers the time required to exercise rights provided for in this Law without any deductions from their wages against such time. He may regulate the exercise of his right in a manner not detrimental to the work progress.

c. Facilitate for the employees of the competent authorities any task related to the enforcement of the provisions of this Law. (Art. 61, SLL)

RULE ON WAGES

Q18 What is “basic wage”?

A: A “basic wage” refers to all that is given to the worker for his work by virtue of a written or unwritten Work Contract, regardless of the kind of wage or its method of payment, in addition to periodic increments.

Q19 What is “actual wage”?

A: The basic wage plus other due increments decided for the worker for the effort he exerts at work or for risks he encounters in performing his work, or those decided for the worker for the work under the Work Contract or work organization regulations. It includes commission, percentage, allowances, increments, grants, reward and other privileges.

Wage- is the actual wage. (Art. 2, SLL)

Q20 What is the importance of knowing the distinction between “wage”, “basic wage” and “actual wage”?

A: It is very important especially in the computation of the end of service award (Art. 84, SLL) because, the benefit may be

delimited by agreement of the employer and the worker pursuant to Art. 86 thereof.

Q21 What is the rule on payment of wages?

A: The workman’s wages and all other entitlements shall be paid in the Country’s official currency. Wages shall be paid during working hours and at the workplace in the accordance with the following provisions:

a. Workers paid on a daily basis shall be paid to them at least once a week.

b. Workers paid on a monthly basis shall be paid once a month.

c. If the work is done by pieces and requires a period of more than two weeks, the worker shall receive a payment each week commensurate with the completed portion of the work. The balance of the wage shall be paid in full during the week following delivery of the work.

d. In cases other than the above, the worker’s wages shall be paid at least once a week. (Art. 90, SLL)

Q22 What is the rule in case of unpaid wages of worker who has finished his work contract?

A: At the end of the worker’s service, the employer shall pay his wages and settle his entitlements within a maximum period of one week from the date of the end of the contractual relation. If the worker ends the contract, the employer shall settle all his entitlements within a period not exceeding two weeks. (Art. 88, SLL)


SALARY/WAGE DEDUCTION

Q23 Can the employer withhold the salary of a worker? What are the grounds or circumstances when salary deductions are allowed?

A: As a general rule, the employer is not allowed to deduct any amount from the salary of the worker without the consent of the latter except for cause allowed by law or agreement of the parties.

a. The law allowed salary deduction by the employer if the worker, as a result of his own fault or violation of the employer’s instructions and not as a result of a third party’s fault or a force majeure, causes loss, damage or destruction to machineries or products owned by the employer while in his custody. (Art. 91, SLL)

Q24 What about private rights claim or debts, can the employer deduct it from the worker’s wages without his consent?

A: No, except in the following cases:

a. Repayment of loans extended by the employer provided that such deduction do not exceed 10% of his wage.

b. Social Insurance or any other contributions due on the workers as provided for by law.

c. Worker’s contributions to thrift funds or loans due to such funds.

d. Installments of any scheme undertaken by the employer involving home

ownership program or any other privilege.

e. Any debt collected in the implementation of a judicial judgment provided that, the monthly deduction shall not exceed one quarter of the worker’s wage, unless the judgment provides otherwise.

First to be collected is alimony, followed by food, clothing and accommodation debts, before other debts. (Art. 92, SLL)

Q25 What is the maximum amount allowed by law to be deducted from the worker’s salaries in case of loss, damage or destruction caused to the employer or his property?

A: Such amount necessary for repair or restoration to the original conditions, provided that such deductions do not exceed a five-day wage per month. (Art. 91, SLL)

In all cases, the deductions made may not exceed half the worker’s due wage, unless the Commission for the Settlement of Disputes determines that further deductions can be made or that the worker is in need of more than half of his wage. In the latter case, the worker may not be given more than three quarters of his wage. (Art. 93, SLL)

DELAYED PAYMENT OF WAGES

Q26 What is the legal remedy of the worker in case of delayed payment of wages or unauthorized or illegal deductions? Is there a penalty for the employer?


A: (a) if any amount is deducted from the worker’s wages for reason other than those specified by law without the latter’s consent, or (b) if the employer delays, without justification, payment of the worker’s wages when they fall due, the worker or his representative shall have the right to file a complaint at the Saudi Labor Office. If found liable, the employer shall be subjected to a fine of not less than five hundred riyals but not more than three thousand riyals. The fine shall be multiplied by the number of the workers subject of the violation. (Art. 235, SLL)

Q27 In case of employer’s violation of the contract such as non-payment or delayed payment of salaries, illegal deduction, and others, does the worker have the right not to report for work or abscond from the employer?

A: It is advised that the worker should comply with the legal processes and avail of the appropriate grievance mechanism and procedure. The worker should notify the employer about his complaint, and should the latter fails to make good of his obligation, the worker should file a complaint at the appropriate Saudi Labor Office.

Absconding from the employer will not help solve the worker’s claim but would only justify employer’s action in reporting to the police authorities. Once reported, the entry blotter or report can no longer be lifted or deleted and the worker is deemed to have violated the immigration laws of the Kingdom which is criminal in nature. In which case, he can only leave the country through deportation procedure after serving the penalties.

RULE ON WORKING HOURS

Q28 What is the rule on working hours under the Saudi Labor Law?

A: A worker may not actually work for more than eight hours a day if the employer uses the daily work criterion or more than forty-eight hours a week if he uses the weekly criterion. (Art. 98, SLL)

Q29 Are there exceptions to the eight-hour rule?

A: Yes, during the month of Ramadan, the actual working hours for Muslims shall be reduced to a maximum of six hours a day or thirty-six hours a week (Art. 98, 2nd sentence, SLL).

Likewise, the working hours may be raised to nine hours a day for certain categories of workers or in certain industries and jobs where the worker does not work continuously. It may likewise be reduced to seven hours a day for certain categories of workers or in certain hazardous or harmful industries or jobs. (Art. 99, SLL)

Q30 Can the employer legally require the worker to work beyond the regular eight-hours work?

A: While the law provides for the eight actual working hours per day exclusive of the intervals for prayers, rest and meals, it also authorizes the employer to require the workers to work beyond, or in excess of the regular eight working hours. The following are the exceptions to the 8 hour rule:

(1) Annual inventory activities, preparation of budget, liquidation, closing of accounts and preparations for discount and seasonal sales, provided that the number


of days during which the workers work shall not exceed thirty days a year.

(2) If the work is intended to prevent hazardous accident, remedy its impact or avoid an imminent loss of perishable materials.

(3) If the work is intended to meet unusual work pressure.

(4) Eids, other seasons, occasions and seasonal activities specified pursuant to a decision by the Minister.

In all of the above cases, the actual working hours shall not exceed ten hours a day or sixty hours a week. (Art. 106, SLL)

Q31 Are there workers who are excluded from the regular eight working hours and regular rest periods?

A: Yes. (1) Person occupying high positions of authority in management and policy, if such positions grant the persons occupying them authority over workers, (2) Preparatory or supplemental works which must be completed before or after commencement of work, (3) Work that is intermittent by necessity and (4) Guards and janitors, excluding civil security guards. (Art. 108, SLL)

REST DAY Q32 Are workers entitled to rest day? Can

they be required to work on Friday?

A: Workers generally are entitled to one rest day a week. Usually, the rest day is on Friday. Under the Saudi Labor Law, after proper notification of the competent Labor Office, the employer may replace this day for some of his workers by any day of the week. The weekly rest day shall be at full

pay and shall not be less than twenty-four consecutive hours. (Art. 104, SLL)

In remote areas and in jobs where the nature of work and operational conditions require continuous work, weekly rest periods accruing to a worker may be consolidated for up to eight weeks if the employer and the workers agree to that effect, subject to the Ministry’s approval. (Art. 105, SLL)

OVERTIME PAY Q33 Are workers entitled to overtime pay?

A: Yes. The employer shall pay the worker for overtime working hours an additional amount equal to the hourly wage plus 50% of his basic wage. If the firm is operated on the basis of weekly working hours, the hours in excess of the hours taken as the criterion shall be deemed overtime hours. All working hours performed during holidays and Eids shall be deemed overtime hours. (Art. 107, SLL)

ANNUAL VACATION Q34 What is the rule on annual vacation?

A: Annual vacation is a worker’s right vested by law, As such, it cannot be denied to the worker. Thus, the Saudi labor law states that: “A worker shall be entitled to a prepaid annual leave of not less than twenty one days, to be increased to a period of not less than thirty days if the worker spends five consecutive years in the service of the employer.” (Art. 109, par 1, SLL)

Q35 Can the worker asks for vacation leave for more than twenty one days?

A: The worker may take an annual vacation leave for more than twenty one days subject to the consent or approval of the employer. (In some cases, the Work


Contract allows for a longer period of vacation). The law provides only for the minimum number of days the worker can claim as a matter of right for a given year of service. In excess thereof, the same is left as a matter of discretion or generosity on the part of the employer.

The Saudi Labor Law, however, states, “the vacation shall be increased to 30 days when the worker completes five continuous years in the service of the employer.”

Q36 Does the employer have the right to deny the worker his right to annual vacation?

A: No. The right to annual vacation is a right accorded to the workers by law. It is therefore illegal for the employer to prevent the worker from availing of the said right.

Q37 Why is it that some employers allow their workers to avail of the annual vacation only in every two years?

A: This is because the Saudi Labor Law allows the worker to postpone, with the employer’s approval, his annual leave or days thereof to the following year. (Art. 110, SLL) Thus, a Work Contract providing that vacation shall be availed of by the worker every two years is valid and binding between the contracting parties.

Q38 Can the employer unilaterally postpone the vacation leave of his workers?

A: Yes. An employer may postpone, for a period of not more than ninety days, the worker’s leave after the end of the year it is due if required by work conditions. If work conditions require extension of the postponement, the worker’s consent must be obtained in writing. Such postponement shall not, however, exceed the end of the year the leave is due. (Art. 110 par 2, SLL)

Q39 Can a worker forego his annual vacation? Will it forfeits his right to vacation leave credits?

A: No. The law provides that “A worker may, with the employer’s consent, postpone his annual vacation or days thereof to the following year.” (Art. 110 par 1, SLL)

This means that the annual vacation leave not availed of by the worker is considered as earned or accumulated leave, which he can enjoy for the following year, Hence, the worker will not forfeit his right by deferring his annual vacation.

Q40 Is the employer duty-bound to provide for plane ticket for a worker availing of his annual vacation leave?

A: Yes, if it is agreed upon in the Work Contract. Otherwise, the law is silent with respect to the provision of plane ticket to a worker going on annual vacation. What the law requires is for the employer to bear the cost of the return plane ticket to the worker’s home country at the end of the relation between the two parties. (Art. 40 par 1, SLL)

As a matter of business practice or company policy, most employers however provide for round-trip plane tickets to workers availing of annual vacation leave as part of the benefit package of their workers.

Q41 Can the worker claim, as a matter of right, the cash value or cost of plane ticket should he decide to forego his annual vacation? Can he claim payment for unused vacation?

A: Unless otherwise allowed by contract, agreement, company policy, practice, generosity of the employer, the worker is not entitled to receive the cost of plane ticket for unspent vacation. He may however claim for his vacation pay if he did not avail of his vacation leave.

The Saudi Labor Law states that the worker shall be entitled to a wage for the accrued days of the leave if he leaves the work without using such leave. This applies to the period of work for which he has not used his leave. He is also entitled to a


leave pay for the parts of the year in proportion to the part he spent at work. (Art. 111, SLL)

LEAVE WITHOUT PAY Q42 Can the worker avail of leave without

pay under the law?

A: Subject to the employer’s approval, the worker may obtain leave without pay for duration to be agreed upon by the two parties. The Work Contract shall be deemed suspended for the duration of the leave in excess of twenty days, unless both parties agree otherwise. (Art. 116, SLL)

Q43 Can a worker work with another employer during vacation spent in the Kingdom?

A: No. If the employer proves that the worker has work with another employer during his vacation, he may deprived him of his wages for the duration of the leave or recover any wages previously paid to him. (Art. 118, SLL)

SICK LEAVE Q44 What is the rule on Sick Leave?

A: A worker whose illness has been proven shall be eligible for a paid sick leave for the first thirty days, three quarters of the wage for the next sixty days and without pay for the following thirty days, unless both parties agree otherwise. A single year shall mean the year which begins from the date of the first sick leave. (Art. 117, SLL)

OTHER LEAVE BENEFITS Q45 What are other leave benefits which the

workers are entitled to?

A: Each worker shall be entitled to full-pay leave on Eids. (Art. 112, SLL)

One day paid leave in the case of childbirth and three days for marriage or in case of the death of a spouse or one of his ascendants and descendants. (Art.113,SLL)

Death of husband leave- 15 days (Art. 160, SLL)

Hajj leave- ten to fifteen days but the worker must have spent at least two consecutive years of service with the employer and can be availed of only once during his service. (Art. 114, SLL)

Examination leave- actual number of examination days but a repeat thereof is without pay. (Art. 115, SLL)

MATERNITY LEAVE Q46 Are female workers entitled to

maternity leave?

A: Under Saudi Labor Law, a female worker shall be entitled to a maternity leave equivalent to “four weeks immediately preceding the expected date of delivery and six weeks following that date.” (Art. 151, SLL)

Q47 Are they entitled to maternity leave pay?

A: Yes, during the maternity leave, an employer shall pay the female worker half her wage if she has been in his service for one year or more, and a full wage if she has served for three years or more as of the date of the commencement of such leave. A female worker shall not be paid any wages during her regular annual leave if she has enjoyed in the same year


a maternity leave with full wage. She shall be paid half her wage during the annual leave if she has enjoyed in the same year a maternity leave at half wage. (Art. 152, SLL)

Q48 Who shall bear the cost of delivery?

A: The law states “the employer shall provide medical care for female workers during pregnancy and delivery.”(Art. 153, SLL)

Q49 Can the employer validly terminate the female worker on maternity leave?

A: An employer may not terminate the employment of female worker or give her a warning of the same while on maternity leave. (Art. 155, SLL)

TRANSFER/REASSIGMENT OF WORKERS

Q50 Are employers have absolute right to transfer or reassign workers from one place to another place?

A: As a general rule, the right to transfer or reassign worker from one place to other flows from the employer’s right to exercise his management prerogative in line with his interest.

This right however is subject to recognized limitations, either by contract or law. Under the Saudi Labor Law, “the employer may not transfer the worker from his original workplace to another place that entails a change in his place of residence, if such transfer is likely to cause a serious harm to the worker and it is not justified by the nature of work.”(Art. 58, SLL)

Q51 Is an Iqama necessary requirement for a worker?

A: Yes. Iqama or residence card is required to prove the worker’s identity and purpose of his stay in the Kingdom.

Without it, the worker may be detained by the police or face possible deportation.

Q52 Who shall bear the cost of Iqama?

A: An employer shall incur the fees pertaining to the fees of the residence permit (Iqama) and work permit, together with their renewal and the fines resulting from their delay. (Art. 40 par 1, SLL)

Q53 Can the employer withhold possession of the worker’s Iqama?

A: The employer has no right to keep worker’s Iqama. Per existing regulation, the employer is required to give the original copy of Iqama to the worker. Any violation of this regulation should be reported to the appropriate Saudi Labor Office or Ministry of Interior.

TRANSPORTATION Q54 Who shall bear the cost of

transportation of the workers?

A: An employer shall provide means for transporting his workers from their place of residence or from a certain gathering point to the places of work and bring them back daily, if the places of work are not served by regular means of transportation at times compatible with the working hours. (Art. 148, SLL)

WORK INJURIES Q55 Who shall bear the costs of treatment if

the worker sustained work injuries?

A: If a worker sustained a work injury or an occupational disease, the employer shall be required to treat him and assume directly and indirectly all necessary expenses, including hospitalization, medical examinations, and tests, radiology, prosthetic devices and


transportation expenses to treatment centers. (Art. 134, SLL)

Q56 Is the worker entitled to a wage during treatment or inability to work by reason of work injury?

A: Yes. In case of temporary disability arising from work injury, the injured party shall be entitled to financial aid equal to his full wage for thirty days, then 75% of the wage for the entire duration of his treatment. If one year elapses or it is medically determined that the injured party’s chances of recovery are improbable or that he is not physically fit to work, his injury shall be deemed total disability. The contract shall be terminated and the worker shall be compensated for the injury. (Art. 137, SLL)

Q57 Is there a compensation for workers who sustained permanent disability or died arising from work injuries or accidents?

A: If an injury results in permanent total disability or death of the injured person, the injured person or his eligible beneficiaries shall be entitled to a compensation equal to his wages for three years, with a minimum of fifty four thousand riyals.

If the injury results in a permanent partial disability, the injured person shall be entitled to compensation equal to the percentage of the estimated disability in accordance with the approved disability percentage guide schedule multiplied by the amount of compensation for the permanent total disability. (Art. 138, SLL)

Q58 If the injury was intentionally caused by the worker, is he entitled to compensation?

A: No. The worker is not entitled to any compensation or benefits including his medical treatment. The same applies to

injury caused by intentional misconduct on the part of the worker. (Art. 139 par 1 and 2, SLL)

Q59 What if the worker insists on treatment to be done in his home country or refuses to be treated by the company designated physician? Can the worker choose who and where to be treated?

A: The employer will be free from any responsibility or monetary obligation to the worker who refuses to be examined by a physician or refuses to accept treatment by the physician designated by the employer without valid reason. (Art. 139 par 3, SLL)

TERMINATION OF WORK CONTRACT

Q60 When and how does a Work Contract terminates?

A: Under Article 74 of the Saudi Labor Law, a work contract shall terminate in the following cases:

1. If both parties agree to terminate it, provided that the worker’s consent be in writing.

2. If the term specified in the contract expires, unless the contract has been explicitly renewed in accordance with the provisions of this Law in which case it shall remain in force until the expiry of its term.

3. At the discretion of either party in indefinite term contract.

4. The worker attained the age of retirement, which is sixty years for male and 55 years for female, unless the two parties agree upon continuing work after his age. The retirement age may be reduced in the cases of early retirement as provided for in the work


organization regulation. If it is a fixed-term work contract which extend beyond the retirement age, it shall terminate at the end of its term.

5. Force majeure.

The Work Contract is also deemed terminated in the following cases:

1. Death of the worker (Art. 79, SLL)

2. Death of employer in certain cases (Art. 79, SLL)

3. Resignation by worker (Art. 85, SLL)

4. Termination by the employer or worker for authorized causes (Art. 80, SLL)

5. Total disability of the worker to perform work (Art. 137, SLL)

6. Serious illness of the worker resulting in long absence from work (Art. 79, 82, SLL)

7. Bankruptcy, dissolution and authorized shutdown of employer’s business, and other cases (Art. 18, SLL)

Q61 How does a Work Contract with unspecified duration terminates?

A: If the contract is of an indefinite term, either party may terminate it for valid reason to be specified in a written notice to be served to the other party at least thirty days prior to the intended termination date if the worker is paid monthly and not less than fifteen days for others. (Art. 75, SLL)

Q62 Is the requirement of advance or prior notice by either party mandatory in all cases of termination or resignation?

A: As a general rule, an employer or worker is required to give prior notice to either party in cases of cancellation of contract before its expiry period, or in case of resignation by the worker.

Failure to observe the prescribed notice period shall make the party liable for indemnity equivalent to the worker’s pay for the notice period or the remainder thereof. (Art. 78, SLL)

However, the requirement of advance notice does not apply to authorized or valid grounds for termination. (Art. 80 and 81, SLL)

VALID GROUNDS FOR TERMINATION BY

EMPLOYER Q63 In what circumstances can the

employer validly and legally terminate the services of the worker?

A: Art. 80 of the Saudi Labor Law enumerated the valid grounds or just cause for the termination of worker’s service, to wit:

1. If, during or by reason of the work, the worker assaults the employer, the manager in-charge or any of his superiors.

2. If the worker fails to perform his essential obligations arising from the contract, or to obey legitimate orders, or if, in spite of written warnings, he deliberately fails to observe the instructions related to safety of the work and workers as may be posted by the employer in a prominent place.

3. If it is established that the worker has committed a misconduct or act infringing on honesty or integrity.

4. If the worker deliberately commits any act or default with the intent to cause material loss to the employer, provided that the latter


shall report the incident to the appropriate authorities within twenty-four hours from being aware of such occurrence.

5. If the worker resorts to forgery in order to obtain the job.

6. If the worker is hired on probation.

7. If the workman is absent without valid reason for more than twenty days in one year, or more than ten consecutive days, provided that the dismissal be preceded by a written warning from the employer to the worker if the latter is absent for ten days in the first case and five days in the second.

8. If the worker unlawfully takes advantage of his position for personal gain.

9. If the worker discloses work-related industrial or commercial secrets.

Q64 What is the effect of worker’s termination of service under the above mentioned grounds?

A: The worker is NOT entitled to an Award (End- of Service Award under Art. 84 of the SLL), advance notice or indemnity provided that he gives the worker a chance to state his reasons for objecting to the termination. (Art. 80 1st par, SLL)

VALID GROUNDS FOR TERMINATION BY WORKER

Q65 What are the grounds whereby the worker can validly terminate the Work Contract?

A: The worker may terminate the contract in the following cases:

1. If the employer fails to fulfill his essential contractual or statutory obligations towards the worker.

2. If the employer or his representative resorts to fraud at the time of contracting with respect to the work conditions and circumstances.

3. If the employer assigned the worker, without his consent, to perform a work which is essentially different from the work agreed upon and in violation of the provisions of Art. 60 of this Law. (which requires the worker to work in cases of necessity dictated by transient circumstances for a period not exceeding 30 days a year)

4. If the employer, a family member or the manager in-charge commits a violent assault or an immoral act against the worker or any of his family members.

5. If the treatment to the worker by the employer or the manager-in-charge is characterized by cruelty, injustice or insult.

6. If there exists in the workplace a serious hazard threatening the safety or health of the worker, provided that the employer is aware thereof but fails to take measures indicating its removal.

7. If the employer or his representative, through his action and particularly his unjust treatment or violation of the terms of the contract, has cause the worker to appear as the party terminating the contract.

Q66 By terminating the contract for any of the aforementioned valid grounds, will the worker forfeit his service award or other indemnity supposedly due him?


A: No. He is entitled to his statutory rights. (Art. 81 first par, SLL)

Q67 Is it advisable for the worker to stop working immediately upon the occurrence of any of the grounds constituting valid termination?

A: No. The determination of the factual basis of the grounds invoked by the worker for valid termination is left to the competent labor office or authorities, especially if the same is disputed or denied by the employer. Such being the case, and to avoid technicalities, it is advised that the worker should avail the assistance of the Saudi Labor Office or competent local authorities.

RESIGNATION Q68 Can either party (worker or employer)

terminate the Work Contract without valid reason?

A: Yes, either party may cancel or terminate the contract for no valid reason but “the party who is harmed by such termination shall be entitled to an indemnity to be assessed by the Commission for the Settlement of Labor Disputes, taking into account the termination circumstances and actual and potential material and moral damages sustained.”(Art. 77, SLL)

Q69 Is acceptance by the employer needed in case of resignation?

A: Legally, there is no need to get the acceptance of the employer provided that the 30-day advance notice has been complied with. However, to preserve harmonious relation with the employer, it is advised that the worker should talk things out with the employer. The employer cannot force the worker to continue his work or duties against his consent or will, but the latter may however be made to indemnify the employer for the consequence of his act or non-

compliance of his obligation in the Work Contract. (Art. 77,SLL)

REPATRIATION Q70 Is repatriation of the worker a legal

right?

A: Repatriation, which is the act of sending the worker back to the point of origin or place of hire, is a mandatory obligation of the employer in the following cases: (1) expiration of contract: (2) when the contract has been terminated for valid reason or just cause as provided for in the contract or law; (3) resignation of worker after complying with the advance notice requirement and satisfaction of the conditions set by the employer: (payment of indemnity, etc.) (4) death of the worker; (5) when repatriation has been decided or determined by the Saudi Labor Office and such other analogous cases. Under these circumstances, the worker can demand for his repatriation as a matter of right subject to clearance in cases there are other offenses or legal impediment, either civil or criminal, imputed against the worker.

Q71 Who shall bear the cost of repatriation?

A: The employer shall bear the cost of exit visa and return ticket to the worker’s home country at the end of the relation between the two parties. (Art. 40 par 1, SLL)

Q72 Under what circumstances will the employer be exempted from shouldering the cost of repatriation?

A: The employer shall be exempted from shouldering the cost of return ticket if the worker shall have absconded or worked in another employer (Art. 233, SLL) or shall have stopped or resigned from work prior to the end of contract. Likewise, a worker shall incur the cost of returning to his home country if he is unfit for work or if he wishes to return to his home country


without legitimate reason. (Art. 40 par 2, SLL)

Q73 Can a runaway worker demand for his repatriation?

A: A runaway worker can demand for his immediate repatriation if his employer fails or refused to send him home for a reasonable length of time and his situations falls under any of the circumstances stated above (Q65, A). Should the employer refused to do so, the worker must file a complaint at the Saudi Labor Office.

However, if the worker ran away or abscond from his employer for no valid reason or causes, repatriation may be demanded after indemnifying the employer unless the latter waives the payment thereof. Absconding from employer will also give the employer the right to report the matter to the police and immigration authorities. Once reported, a worker can only be repatriated through deportation.

Noteworthy to remember that if a worker has valid ground or causes of terminating the contract, such as clear violation of contract by the employer, the proper course of action is to file a complaint at the Saudi Labor Office if conciliation is not successful, and not to abscond from the employer.

END OF SERVICE AWARD Q74 What is the rule on the grant of end of

service award?

A: Upon the end of the work relationship, the employer shall pay the worker an end-of-service award of a half-month wage for each of the first five years and one-month wage for each of the following years. (Art. 84, SLL)

If the work relationship ends due to the worker’s resignation, he shall be entitled

to one-third of the award after a service of not less than two consecutive years but not more than five years, two-thirds if his service is in excess of five consecutive years but not less than ten years and to the full award if his service amounts to ten or more years. (Art. 85, SLL)

Q75 What is the basis in the computation of service award? What are included as part of worker’s monthly pay?

A: The Saudi Labor Law clearly states, “The end-of-service award shall be calculated on the basis of the last wage and the worker shall be entitled to end-of-service award for the portions of the year in proportion to the time spent on the job.” (Art. 84, SLL)

The law mentioned “wage” which means actual wage to include all allowances and benefits which are given on a regular and fixed basis, such as housing allowances, food allowances, bonus, overtime pay if it is a fixed amount and given regularly by employer, and others. Housing or accommodation allowance is computed by assessing the equivalent rent value for housing with the same kind available elsewhere. By practice, the cost of accommodation is sometimes fixed at 1/6 of the workers monthly pay.

Q76 Is the worker entitled to service award even if he is receiving yearly bonus?

A: Bonus is an incentive given by the employer to his worker to promote or increase productively. It is an act of generosity or goodwill on the part of the employer. Service award, on the other hand, is an incentive given to the worker in consideration of his length of service rendered to the employer. If bonus is intended as a benefit in favor of the workers, the same should be given in addition to, and not as part or substitute of the end of service award. After all, end of


service award is mandated by law even if not expressly stated in the contract, whereas bonus is a voluntarily act on the part of the employer.

FIXED AND INDEFINITE WORK

CONTRACT Q77 How is a fixed term contract different

from an indefinite contract?

A: There have been confusions in determining whether a contract is of fixed term or indefinite term. The following criteria may be useful to distinguish one from another:

1. In a fixed term contract, the validity or duration of the contract is expressly provided in the contract or agreement. On the other hand, an indefinite contract is silent or does not contain a provision about its validity, duration or expiration.

2. Actual or Implied (Automatic) Renewal of a Fixed-Term Contract – A fixed-term contract shall terminate upon expiration of its term. If the two parties continue to implement it, it shall be deemed renewed for an indefinite period of time (Art. 55 par 1, SLL). In which case, the duration of the work permit shall be deemed as the duration of the contract for non-Saudi workers (Art. 37, SLL).

3. If a fixed-term contract incorporates a clause providing for its renewal for a similar term or a specified term, the contract shall be renewed for the period agreed upon. If the contract is renewed for two consecutive terms or if the original contract term and the renewal period amount to three years, whichever is less,

and the two parties continue to implement it, the contract shall become an indefinite term contract (Art. 55 par 2, SLL).

NO OBJECTION CERTIFICATE

Q78 Can the employer be obliged to issue a No-Objection Certificate (NOC) in favor of the worker?

A: No. A worker cannot compel the employer to issue a no-objection certificate for the purpose of returning to the Kingdom. However, the employer is required to give the worker upon his request and free of charge, a Certificate of Work Experience, indicating the date of his employment, date of end of his work, his profession, and the last wage received. If the certificate contains any remarks that are prejudicial to the worker’s reputation or likely to limit his employment chances, the reasons shall be given. (Art. 64 par 1, SLL)

Q79 When is a No-Objection Certificate needed in case of workers who want to return and work again in the Kingdom?

A: As a general rule, a worker would not need a No-Objection Certificate to return to the Kingdom for work. However, if he had been previously holding a sensitive or highly confidential position where he was privy to his employer’s business or trade secrets, he needs NOC if he returns for work within 2 years. This is necessary especially if the Work Contract of the worker contains provision prohibiting re-employment within two years. (Art. 83, SLL)


TRANSFER OF SPONSOR/ RELEASE

Q80 What is the so-called sponsorship rule?

A: The so-called “sponsorship rule” refer to the rule whereby foreign workers need to have sponsor for his visa to work in the Kingdom. The sponsor under the rule must be the employer of the foreign worker. Thus, working with a person who is not the worker’s sponsor or guarantor is considered illegal and a ground for deportation. The parties involved are also liable for fines of not less than five thousand riyals and not more than twenty thousand riyals, which fine shall be multiplied by the number of person subject of the violation. The worker shall be repatriated at the expense of the person who employs him. (Art. 233, SLL)

Q81 May a worker demand for a change or transfer of sponsor?

A: No. Transfer of sponsorship is not a legal right. It is subject to the discretion of the sponsor and approval of the official authority.

Q82 What are the requirements and procedure for the change of sponsor?

A: The act of transferring sponsorship of workers has been in practice and is sanctioned by the Ministry of Labor. Under present decision, a worker can only transfer to other sponsor/employer after having worked with his current employer for at least two years.

The first thing that the worker should do is to secure the consent and approval of his sponsor to transfer to another employer.

The procedure then is for his prospective sponsor to write a letter expressing his interest in the worker’s service and requesting for his release. If the conditions are so acceptable to the present sponsor, he should formally consent thereto and sign the release papers. Thereafter, the prospective sponsor should present these documents with the application for transfer of sponsorship and iqama for official approval of the Ministry.

Unless the legal rules and procedures are followed, an employer may not allow his worker to work for others and a worker may not work for other employer. Similarly, an employer may not employ worker of other employers. An employer may not allow a worker to work for his own account and a worker may not work for his own account. (Art. 39, SLL)

REMEDIES AND PROCEDURE

Q83 What are the remedies available to the worker in case of employer’s violation of the provision of the Work Contract or the labor law?

A: The first step for the worker to do is to thresh out the matter personally or in writing with his employer or the latter’s authorized representative. He may also inform the Philippine Recruitment Agency (PRA) and/or its counter-part agent in the Kingdom for information and assistance. If the employer refuses to settle the matter, the worker may seek the assistance of Embassy/POLO-OWWA in the conduct of negotiation or conciliation with the employer. If settlement of the worker’s complaint is not possible, the worker must


seek the remedies available before the Saudi Labor Office.

Q84 What is the procedure in filling a complaint before the Saudi Labor Office?

A: The worker should file his complaint in writing (Arabic) stating his name, position or nature of work, name of employer or company, address, telephone number and his cause of action and the complainant may also submit supporting documents to substantiate his claim. The complaint must be signed by the worker. The worker may seek the assistance of the Embassy/POLO-OWWA for translation service.

Cases shall be filed at the competent labor office or at the Preliminary Commission for Settlement of Disputes in whose locality or under whose jurisdiction the place of work falls. Prior to referring the dispute to the Commission, the labor office (Settlement of Labor Dispute Office, “Qismul Qadaya” or Labor Inspection Office, “Qismut Taftish”). shall take the necessary measures to settle the dispute amicably. (Art. 220, SLL)

Q85 Is it necessary for the worker to file his complaint personally?

A: Yes. As a rule, the Saudi Labor Office requires that the complaint be personally filed by the complaining worker. In exceptional cases however where the complaining worker is prohibited by his employer from going outside the premises of his workplace, the complaint may be submitted by his duly authorized representative.

Q86 Is there a fee in filing a complaint?

A: No, the filing of the complaint before the Saudi Labor Office is free of charge.

Q87 Is an Arabic Interpreter needed in the filing of the complaint?

A: No, an Arabic Interpreter is not required. An Arabic Interpreter is however necessary and required at times by the court when the case is heard at the Preliminary Commission (Lower Court) and Higher (Higher Court) Commission for Settlement of Disputes.

Q88 Can the employer terminate the worker by reason of his filing a complaint against him at the SLO?

A: Once the complaint is filed, the employer is prohibited from making any move or action as to cause prejudice to the worker. The employer may not dismiss or penalize a worker without written permission from the appropriate Commission.

PRESCRIPTIVE PERIOD FOR FILING CLAIM OR

ACTION

Q89 What is the prescriptive period? Is there a prescriptive period of filing a complaint in the Saudi Labor Office?

A: Prescriptive period refers to the period within which the worker is required by law to file his claim or complaint against his employer. If the worker fails to act within the given period, his right shall be deemed to have prescribed or lapsed, and he shall be barred from filing the same in the Saudi Labor Office. This means that the worker will lose his right to claim by default or inaction.


Art. 222 of the Saudi Labor Law provides for one (1) year prescriptive period as follows:

1. No case shall be accepted by the Commission provided for in this Law involving a claim of the rights provided for in this Law or arising from a work contract after twelve months following the termination of the work relation.

2. No case or a claim of the rights provided for in the previous Labor Law shall be accepted after twelve months following the effective date of this Law.

3. No complaint regarding violations of the provisions of this Law or the regulations and decisions issued hereunder shall be accepted after twelve months following the date of the occurrence of the violation.

Q90 Are decisions rendered by the Preliminary Commission for the Settlement of Disputes final and executory?

A: If either party is not satisfied with the decision rendered by the Preliminary Commission, he shall file an appeal to the Higher Commission in certain cases within thirty (30) days from receipt of copy of decision otherwise the decision shall become “final and enforceable”. (Art. 217 & 218, SLL).

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Hotlines of the Embassy in Riyadh and POLOs

Philippine Overseas Labor Office - Riyadh

0545917834

Philippine Overseas Labor Office – Eastern Region

0501269742

Philippine Overseas Labor Office – Central Region (Buraidah and Hofuf)

0507537997

Philippine Overseas Labor Office - Jeddah

0561956142

Assistance to Nationals

(Police Cases, detention, death and other emergencies)

0569893301

faq saudi labor law by attychavez phl embassy riyadh

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