CHAPTER- 4 - THE SAUDI LEGAL SYSTEM ANDTHELABOURCODE

90

In this chapter we shall examine in detail, the Saudi legal system, including the

Labour Code. By way of comparison, we shall briefly examine the corresponding

law of Kuwait, and a passing reference shall be made to the system of immigration

control regime prevalent in the USA - all three countries are large labour importing

countries. and, so, a relative analysis would present a better picture.

4.1. SAUDI ARABIA AND ISLAM

a) Basic Tenets of 1~/am

[n order to understand the legal system of Saudi Arabia, it is necessary to acquaint

ourselves with the basic tenets of Islam. These are to be found in the Koran. which

1:0, based upon the revelation of God to the Prophet Mohammed through the Angel

Gabriel. The Prophet received his first revelation in AD 610 at Mecca-~ the Holiest

•.:ity in Islam. He had to f1ee to Medina in AD 622, which is considered to be the

year the \1uslim era started. He returned to Mecca in AD 630 and passed away in

·\D 632 A central part of the message of Islam is that, a) there is only one God: b)

all men are equaL and c) man achieves dignity through knowledge. 1

b) Hadith and The Slwriat

The Hadith represent the sayings and acts of the Prophet. Scholars point out that in

certain instances there may be a lack of historical evidence which substantiates that

Mohammad actually did or said what may be the central points of some Hadith.

·'The Quran and the Hadith provide the framework for the Shariah, the bodv of

Islamic law. In the Islamic tradition, the Shariah constitutes the law for religions and

secular life.'' 1(a)

The Shariat incorporates various fundamental concepts relating to economic activity.

They mav be summarized as:- a) business activity is considered to be a social!\ . - .

1 Islam and Work by Russel Moore and Nejdet Delener, in Workforce Management in the Arabian

Peninsula. George Roukis and Patrick Montana (eds.), 1986, Greenwood Press, Westport. l(a) ibid.

91

useful function; b) though exorbitant interest rates are not approved, compensation

for risk [e.g. insurance], is acceptable, c) economic prosperity is encouraged, but,

blatant display of wealth is frowned upon: d) Zakat, a benevolent tax is to be paid

every year, to finance welfare activities, for the less priviledged: e) Uma. another tax.

is levied on land owners of agricultural land, for the general welfare of the society.

These five basic principles are relevant from our standpoint as. they from the basis of

economic activity in an Islamic state- the labour market, is but one aspect of it.

According to the Hadith, i.e. the sayings and acts of The Prophet, workers are

normally considered "beloved of God". implying that they enjoy a special status.

Moore & Delener, say that ''Islam adopts the socially pragmatic position that

employers and employees are actually working for the goal of expanding output and

are thus different categories of workers. The fundamental relationship is not

conceived of as being antagonistic . ., Each group is supposed to receive output in

proportion of its participation in its production.'"(b) lslam. therefore, suggests an

egalitarian principle of comity between capital and labour. From our discussion in

the previous chapter, it may not be possible to support this proposition, but, atleast,

theoretically, this is what, Islam proposes. Moore & Delener further say: "The

exploitation of workers is reprehensible because of the responsibility of an employer

to the other. Virtue and human dignity can be measured only by the degree to which

a person (even a manager) aids others and multiplies benetl.ts to them." 1(cl It is seen

that theoretically, as a religious framework, Islam is benevolent towards workers; the

fact that in a state, which is strictly Islamic, despite such noble religious stipulations,

the condition of workers especially to lowest level workers is so hard, is difficult to

explain.

The Shariat covers the economic relationship between employers and employees,

including areas like terms of employment \Vages, working hours, holidays, safety

and health of workers, etc. "The control of working condition is left upto the

conscience of the employer as a faithful believer (but. the Government in Islamic

l(b) ibid. l(c) ibid.

92

societies also reinforce this with legislation)." 1(d) Though Islam, through the Koran

and Hadith and the Shariat are the fountainhead of all laws. and the practice of most

Islamic countries including Saudi Arabia, is to draw the theoretical basis f(Jr

employer-employee relations from the Shariat. ·'It is clear that, in practice, there are

cases of divergence from the original scheme which today defines the ideal

relationship. Some of these the are result of modernization and secularization efforts

.. others seem to be the result of individual perception of employers and employees

. . . Last. but by no means the least, is the role of human avidity and a struggle for

power to obtain the greater share of production . . . These seem to be the main

obstacles to the realization of the Islamic economic system ... [but] these principles

continue to determine Government polices in Muslim countries."2 The dichotomy

between the religious prescription, and its application, is fairly clear. Shabon · s

attempts to explain this. to the avarice of individual employers, is well taken. but

cannot be accepted. as. the Saudi labour market, as a whole, represents this negative

tendency: when. the contradiction between theory and practice is so wide. then it

appears to this \\Titer. individual employers cannot be blamed singularly; the system

:cls a whole. is symptomatic to these contradictions.

c) The Saudi Legal System- Courts

Turck says that .. Since 1928, Saudi courts officially have relied on the Han bali

School of Islamic Law. one of the four such schools. [n practice. the Saudi courts

apply Sharia, to the exclusion of any other regulations, in cases involving domestic

relations (including decendents' estates), criminal matters, questions of property, and

generally in contract disputes."3 Turck further says that all Saudi Courts. whether

they are Shariat Courts. or commercial courts or arbitration tribunals. apply the

Shari at rules of evidence and procedure. Even if these rules are made out in the fom1

of ministerial rules and regulations, they are implied to confom1 with the principles

of Shariat.

!(d) ibid. 2

Anwar Sbabon, The Political, Economic & Labor Climate in the Countries of the Arabian Peninsula Philadelphia: Industrial Research Unit, Wharton School, University ofPeninsula, 1981. '

3 Nancy B. Turck Dispute Settlement in Saudi Arabia, International Lawyer, Vol.22, No.2. Summer. 1988.

93

The Saudi legal system is characterized by various levels and types l>f courts, Whilst

Shariat courts have general jurisdiction, including over civil matters there are

various specialized judicial committees, who have specialized jurisdiction. These

specialized judicial committees consist of the following :-

a) The Board of Grievances

b) The Commercial Papers Committee

c) The Committee for Settlement of Commercial Disputes (CSCDl

d) The Commercial Agency Commission (CAC)

e) The Saudi Arabian Monetary Agency (SAMA) Committee for Banking Disputes,

f) The Primary and Supreme Commission for Labour Disputes.

In a later section, we shall examine some of the more impor1ant facts relating to the

Commission for Labour Disputes. For the present it shall be adequate, if \Ve

highlight the following: -

(i) The Primary Commission for Labour Dispute have exclusive and final

jurisdiction over labour disputes relating to a) Claims not exceeding 3000 SR: b)

request to stay execution of unlawful termination by employers, and c) the

imposition of fines on employees, by employers.

(ii) The Primary Commission also have original jurisdiction m cases involving a)

claims in excess of 3000 SR; b) generally relating to termination; c) involving labour­

related injuries; the orders of the Primary Commission, in respect of these matters, are

appealable to the Supreme Commission.

(iii) The Labour Regulations permits employers and employees to submit their

disputes to arbitration, rather than to the Primary Commission. The arbitration

agreement must specify the procedure to be followed and the time-frame; it: in the

arbitration agreement it is provided that the a\vard of the arbitration will be finaL

then, no appeal against it may be made, rf no such stipulation is made, then, the

award can be challenged in the Supreme Commission.

Saudi Courts do not recognize conflict between laws; their interpretation about the

primacy of Shariat is supreme and final; if any conflict among laws is recognized,

then it would, at best be. interse, between the various schools of Islamic laws; if the '

conflict is perceived to be between Shariat and any other secular laws, obviously,

Shariat shall prevail. Turck gives the following example to explain the situation:

" ... should an American employee whose employment contract for work in Saudi

Arabia with an American company is (i) subject to the law of one of the U.S. States

and (ii) provides for dispute resolution in a court of that State, choose to sue his

employer in Saudi Arabia, the Commission for Labour Disputes probably will

assume Jurisdiction and apply Saudi Law.''3(a) In our context, it can hypothetically

be said that, if an employment contract, is made subject to Indian laws in Indian

Courts, and, if the employer. approaches the Labour Commission, it would be heard

by the said Commission. to that extent rescinding the provisions of the contract.

According to the Library of Congress Database, the Saudi legal system, is based on

the Shariat, or Islamic Law It said that Shariat was applied throughout the country

in strict accordance with the interpretation of the Hanbali School of Sunni Islam.

Because pious Muslims believed that the Shariat was sacred law, they accepted as

judges or Qadis, only men who were well versed in the sources of the Shariat - the

Koran and the Hadith.

With this brief introduction about the relationship between Islam and the Saudi legal

system, we need to examine the main features of the Saudi labour code. However.

before doing that, it shall be useful, if we examine the major features of the Saudi

legal system.

4.2 THE SAUDI LEGAL SYSTEM

a) Schools of Law

The Saudi legal system, is based upon the four major schools of Islamic law: the

Hanbali School; the Shajii School; the Hanifi School; and the Maliki School.4 It is

said that before the unification of Saudi judicial system, the courts and judges used to

J(a) ibid. 4

This section draws its main input from the Website of Saudi Arabia, at http://www.saidinf.com/

95

rely upon these various schools; the region played an important (kterminant. viz. in

the Western region. the Hanafi and Shajii Schools were dommant, whilst in the

central region. the Hanbali School was important. The Saudi Gc,vernment says: ··

The Courts/Judiciary in the Kingdom of Saudi Arabia nO\\ issues its (sic)

rulings/judgements/decisions on the basis of what is stated in the Holy Quran and on

the Sunna (practices/mode of life) of the Prophet, and is guided without being

limited to the specific opinion of any one of the aforementioned schools of law:·

b) Judicial System

When King Abdul Aziz ibn Saud consolidated his control over the Kingdom of

Saudi Arabia. three legal systems operated. within the territory: the first was that of

Hijaz, which had an Ottoman orientation; the second was Nejd under which. an

Amir, similar to a provincial Governor, alongwith a judge. disp<.:nsed JUstice: the

third, was the tribal legal system. In 1927, the King issued a Royal Decree. aiming

to unify the judicial system. Three categories of courts were provided for:­

expeditious courts: Shariat Courts; and the Commission on Judicial Supervision.

Basically, the legal system, as it exists today, has evolved on the Royal Decree of

1927; a legislation of t 952, the Attributions of Shariat Jurisprudence

Responsibilities, which lays down details in respect of Notanes. the Property

Department and Summoning Officers, is only a further enabling provision. and does

not radically change the legal system. The Ministry of Justice \\as established by

King Faisal in 1970, and is responsible for administering the country's more than 300

Shariat Courts. The Minister of Justice is appointed by the King from among the

country's most senior ulemas, and is the defacto Chief Justice. He is assisted by the

Supreme Judicial Council, a body of eleven members chosen from among the

leading ulema. The Supreme Judicial Council supervised the works of the Courts.

reviews all legal decisions referred to it by the Minister of Justice. expressed opinion

on judicial questions and approved sentences of death and amputation. Since 1983.

the Minister of Justice also serves as the Chief of the Supreme Judicial Council. a

position that has further enhanced his status of Chief Justice.

96

c) Role of ULEMA or Priests

Being an Islamic State, governed by the guiding principles of the Koran. it is

inevitable that the Ulema. or priests. play a dominant role in the affairs of the State.

We find that the Ulema play significant roles in the following areas: - the judicial

system of Saudi Arabia; the implementation of the rules of the Islamic Shariat;

Religious Guidance Group with affiliated offices across the Kingdom; Islamic legal

education and theology at all levels in Saudi Arabia; religious jurisprudence;

preaching and guidance throughout the nation: supervision of girl's education;

supervision of all Mosques in the Kingdom: preaching Islam abroad: research on

Islam; acting as Notaries Public, and, handling of legal cases in courts according to

Shariat. It is thus seen that the Ulema have both. religious and secular. or. legaL

functions. Ofcourse, in our context, the Ulema's would have a limited role, as,

specialized Labour Commissions or Courts are provided for adjudicating labour

disputes; it appears that Ulemas would have a limited role to play in the matter of

expatriate workers, unless the crime committed is against Islam.

The Kingdom says that the Holy Koran is more suitable than any secular

Constitution for them, and therefore, the primacy of Islam in the Kingdom.

Consequently, places of worship of other faiths. viz. temples. churches. etc. are not

allowed in the Kingdom. Preaching of other faiths is also not allowed. No citizen of

the Kingdom can profess any religion other than Islam-- the only non-Muslim being,

expatriates.

d) Basic Principles underlying AL-Zakat

Of the five pillars of Islam, viz. Al-Shaha-dah (testimony), al-Salah (Prayer), Al­

Siyarn (Fasting), Al-Zakat (Alms giving) and Al-Haj (Pilgrimage), it would be

appropriate to state the basic principles underlying Al-Zakat. This aspect of Islam

represents its equitable distribution of wealth. part; every Muslim should give a

percentage of his income, either in cash or kind, to the poor and needy. This has the

sanction of the Government and the Department of Zakat, under the Ministry of

Finance, enforces this. It is estimated that Zakat \Vould normally represent 2.5% of

an individual's legal income. Since it is required from the rich to satisfy the needs of

97

the poor, [Zakatj, no doubt enhances amity and caring within society and strengthens

the relationship between the wealthy and the indigent. It reflects fulfillment of an

early concept of social justice. as it is taken from each person according to his

capacity.

e) Salient Provisions of THE BASIC LAW OF THE KINGDOM

The BASIC LAW OF THE KINGDOM sets out the general principles on \\hich

the Kingdom is founded, as well as the rights and obligations of the State and the

citizens. In tenns of Article 5 of the Basic Law. the system of Government shall be

Monarchial, with the male descendents of the founder. King Abdul Aziz bin Abdul

Rahman Al Saud solely being eligible. The King names a Crovvn Prince. and he

shall attend to all duties assigned to him. By virtue of Article 7 the regime derives

its powers from the Holy Koran and the Prophet's Sunnah (i.e. traditions), which

enjoy primacy over the Basic Law and all other laws. Article 8 states that the system

of Government in the Kingdom is established on the foundation of justice. ·'Shura''

and equality in compliance with the Islamic Shariat (the revealed law of Islam).

Article 17 says that ownership. capital and labour are the fundamentals of the

Kingdom· s economic and social life. They are private rights that serve a social

function in conformity with Islamic Shariat. Article 21 _says that Zakat shall be

levied and dispensed to it's legitimate beneficiaries. Article 22 says that economic

and social development shall be achieved in accordance with a methodical and

equitable plan. Article 26 stipulates that the State shall protect human rights in

accordance with Islamic Shariat. Article 28 provides for extending job opportunities

to all able-bodied people and shall enact laws to protect both the employer and

employee. Article 31 stipulates that the state shall promote public health and shall

provide medical care to every citizen.5

Article 36 is significant; it says that the State shall ensure the security of all its

citizens and expatriates living within its domain. No individual shall be detained,

5 It is notable that in this Article, the right is extended to citizens only; as a reference point, attention is

invited to the judgement of Hon'ble Supreme Court of India, in Chairman, Railway Board vs. Chandrima Das (2000) (2) SCC 465. wherein, it was held that fundamental rights are equally applicable to foreigners also. -

98

imprisoned or have his actions restricted except under the provisions of law_ Article

±_l states that foreign residents in the Kingdom shall abide by its regulations and

shall show respect for Saudi social traditions. values and feelings, Article 44 divides

the powers of the state into three parts - JudiciaL Executive and Organizational. The

King is the ultimate source for all these powers_ Article 46 says that judicial

authority is independent: in discharging their duties, the judges bow to no authority

other than that of Shari at. Article 4 7 guarantees equal rights to citizens and

expatriates, in the matter of litigation. Article 48 says that courts shall apply the

provisions of Islamic Shariat to cases before them, according to the Holy Koran and

the Prophets Sunnah, and other regulations issued by the King. In tenns of Article

49, courts shall have the jurisdiction to deal with all kinds of disputes and crimes.

subject to the provisions of Article 53, which deals with the Court of Grievances

The Basic Law. the more relevant of whose provisions have been enumerated above.

sets out the general outline of the Saudi Legal system. From our perspective. and

relevant to our context, it is reiterated that Articles 7. 17, 26, 28, 36, 41, 46 and 4 7 of

The Basic Law 6 are significant. A brief critique of some of these Articles is

necessary, at this stage,

(i) Article 7 - gives primacy to the Holy Koran, and, the Prophet's Sunnah 's

over the Basic Law, and, all other laws; in effect every resident - i.e,, either citizen

or expatriate. - in the Kingdom. would be subject to this Article: this may be true.

even, if it was never intended to be so.

(ii) Article 17 -- is a provision in equity between Capital and Labour, seen in the

context of the Shariat; if it can be called so, this is the Islamic version of Socialism:

however. the reality reveals that Saudi Arabia is not a socialist but, a capitalist State.

(iii) A11icle 26 - enjoins upon the State to protect human rights in accordance

with Islamic Shariat; obviously. the standard of protection of human rights under

[slamic Shariat, may differ from other systems of human rights protection -

sometimes, even, to the disadvantage of the expatriate.

6 Extract of THE BASIC LAW is annexed.

(iv) Article 28- whilst guarantee of providing jobs to all able- bodied persons is

available, the low participation rates of the Saudi population. reveals this may not be

strictly implemented; laws would be made for the protection of the employer and the

employee: in a later section we shall examine this in detail, to see whether the

balance is maintained between both the factors of production.

(v) Article 36 - though it guarantees the rule of lav> to all citizens and

expatriates. we have already given an indication that this provision may also not be

very stnctly implemented. Reference is made to the instances of Scott J. Nelson and

the two British nurses, referred to in an earlier chapter.

(vi) Article 41 - makes it obligatory upon expatriates that they shall abide by

regulations. and conform with Saudi traditions; it may be argued that this may

represent an effort at imposing conformity, without leaving any scope to adhere to

personal. native traditions, even privately. In an earlier chapter. we have already

alluded to this phenomenon, in real terms.

(vii) Article 4 7- though it guarantees equality before the la'vv to the citizen and the

expatriate, this may remain, a noble intention, as is often the case.

f) Provisions of the LAW 0 F THE COUNCIL 0 F MINISTERS

Article _]l of the LAW OF THE COUNCIL OF MINISTERS states that the

Council of Ministers shall study the draft laws and by-laws referred to it. and shall

vote thereon article by article, and shall subsequently put them to vote as a whole in

accordance with the procedure laid down in the Council's internal bv-Iaws. Article

22 of this law states that every Minister shall have the right to propose a draft lav.: or

by-law related to the activities of his Ministry. Similarly. and with the approval of

the Prime Minister, every Minister shall have the right to propose anything that he

deems should be discussed by the council of Ministers. Article 23 of this Law states

that all Royal Decrees shall be published in the official gazette. and shall be effective

from the date of publication, unless otherwise provided. These three articles set out

the manner in which laws can be made in the Kingdom.

100

g) Provisions of MAJLIS AL SHURA LAW

Article I 5 of the MAJLIS AL SHURA LAW says that the Majlis may express its

opinion on the general policies of the State referred to it by the Prime Minister.

Interalia. it may study laws. regulations, etc. and offer comments thereon; it may also

interpret laws, and discuss and make suggestions on the reports of the various

Ministries. It is. therefore possible for the Majlis to examine the Labour Code and

also consider and comment upon the annual Report submitted by the Ministry of

Labour and Social Affairs. Article 18 of this law empowers the Majlis to suggest

reviews in Laws, etc.

The relevant provisions of the various laws mentioned above give a general idea

about the legal framework of S. Arabia - the law-making authority and procedure.

the procedure for reviewing laws, etc. This was by way of a general introduction:

with this background, it \vould be possible to approach the Labour Code and other

enactments.

4.3 THE LABOUR CODE- A Review

THE LABOUR CODE, [herein after referred to as "'the Code"], was issued on 15-

ll-1969. by virtue of Royal Decree Number M/21. It is divided into thirteen

chapters, and consists of 211 sections. The outline of the Code is as follows: -7

I a) \ Chapter I - General Provisions Section 1-22 1--- I i b) I Chapter II - Labour Inspection 23-38

~ I Chapter III - Combating Unemployment; vocational 39-69

r~~ Rehabilitation of the Disabled.

+-:- --

! Chapter IV - Contracts of Employment 70-98

Chapter V --1-------

- Seamen's Articles of Agreement 99-114

/ f) Chapter VI - Protection of Wages 115-127

hD- Tbapter VII Protection of Social Services --

- 128-144

I h) i Ch~pter VIII - Construction ofNew Establishments --

145-146 -----------

7 Extract of THE LABOUR CODE is annexed.

101

[il ·[C:h~-p-te_r_I_X ____ -~--;-:_:_:_o_f_W_o_r_k_, _W_e_e_kl_yR ---e -~~Vacation-~ -- -147-159-

l~ j) -__ -hii----Ch--a-p_t_e_r_x __ ---+-_E_m_p_l_o __ yment of Women, Young, t-----~-6-0--171 Persons & Children

----j------------1

k) Chapter XI Labour Disputes Boards 172-188 1

-l) ___ c:hapter XII - Penalties 189-208 i

m) Chapter XIII - Final Provisions 209-211 I i

---------------------'-------------------------------~

In our examination of the Code. we shall consider Chapters I. IL Sections -P~-50.

Chapters IV. VI, VII, IX, XI, XII and XIII.

a) Application of THE LABOUR CODE

Section 2. which deals with application of the Code, says that the Code shall apply to

any contract under which any person undertakes to work for consideration of \\age.

and shall include apprentices. and employees of Government. local authorities. de.

Significantly, the Code would not apply to, inter alia, domestic servants. and persons

regarded as such. Section 6 says that it would be illegal to violate any of prm isions

of the Code. by any regulations or contracts of employment; in other words. if any

provision in the employment contract is contrary to the provisions of the Code. then.

such provision would be null and void. Section 6 defines ''wage'' and is doni.' so in

the widest ambit, including payment in kind, commissions and tips. when. it is

possible to determine the quantum of the same; wages are also inclusive of all

allowances. including high cost of living allowance and family allowance.

b) Rights and Obligations

Section 9 stipulates that, it is necessary that both the employer and the employee. are

aware about the contents of the Code, so that, they have knowledge about their

respective rights and obligations. It is further provided that in every establishment.

which employs twenty or more persons, a set of rules, duly approved by the Ministry

of Labour, should be displayed at a prominent place, which should contain the

following information:-

(a) Classification of the employees according to their occupational categories;

(b) Work periods, official holidays, weekly rest day, pay day;

(c) Work shifts;

102

(d) rules governing attendance, tardiness, absence, entry into and exit from the

workplace, and inspection;

(e) vacation and eligibility therefor;

(f) any other details required by the nature of work in the establishment:

The section further provides that disciplinary rules, types and nature of misconduct,

employees' duties and obligations and corresponding fines and disciplinary action,

which are in consonance with the standard disciplinary rules, duly approved by the

Ministry of Labour, must also be displayed in the workplace. In our findings of the

field study in the previous Chapter, it was reported by most respondents that they

were not aware of any written rules regarding their terms of employment: obviously.

this is in violation of Section 9 of the Code.

c) Grievance Redressal Machinery

Section 12 says that if any complaint 1s received against any employer or his

designated representative, such complaint shall be investigated by a Board of three

persons, one of whom shall be selected by the Ministry of Labour, another

representing the Personnel Bureau and the third designated by the Labour Disputes

Board. If the complaint is not proved, then a fine of minimum 500 SR and

maximum of 20,000 SR may be imposed on the complainant. If the complaint is

proved, then, a report shall be forwarded to the Minister of Labour, who shall issue

suitable instructions. By virtue of Section 13, unless complaints are made within

twelve months from the date of violation, they shall be barred by limitation:

similarly, complaints made beyond twelve months of termination of contract. shall

also be barred.

d) Language of Resolutions

Section 16 states that Arabic language should be used m all resolutions. records.

instructions etc. ln case. any employer used any foreign language, the Arabic text

103

shall prevail. Section 22 is a prohibition to both employers and employees. to abuse

any of the provisions of the Code. ·'It is also illegal for any employee or employer to

do any act that may bring pressure to bear on the freedom of the other or on the

freedom of other employees or employers with the object of obtaining any interest or

supporting any point of view which they adopt and which is inconsistent with the

freedom of work and the jurisdiction of the authorities concerned with the settlement

disputes " Therefore, not only employers and employees are forbidden to exploit

each other. but also barred from interfering with the work of authorities.

e) Labour Inspection

Chapter II deals with labour inspection. For our purposes, it shall be sufficient. if we

restrict our discussion to two aspects - the purpose of labour inspection. and. the

rights of inspectors. Section 24 deals with the purposes of labour inspection. which

are as under:-

(i) Supervising the proper enforcement of the proviSIOns of the Code. with

particular reference to conditions of work, wages, control and protection of workmen

at the workplace, employees' health, etc.

(ii) furnishing employers and employees with information and technical guidance

that will enable them to adopt the best means for the enforcement of the varwus

provisions of the Code;

(iii) informing the competent authorities of the deficiencies which the provisions

of the Code fail to remedy and suggest necessary action;

(iv) recording violations of the provisions of this Code and of the decisions issued

by them

It will thus be seen that the mam purpose of Labour inspection 1s to verify the

enforcement of the various provisions of the Code.

104

f) Rights of Inspectors

Section 27 deals with the rights of inspectors. They have the right to:-

(i) question the employer or the employees separately or in the presence of

witnesses about any matter relating to the enforcement of the Code:

(ii) examine all books. records and documents required to be kept under the

provisions of the Code;

(iii) take sample/s of the materials used or handled m the industrial and other

operations that are subject to inspection, if such materials are believed to

have a harmful effect on the health and safety of workers.

By virtue of section 31, Labour Inspectors are enjoined upon to keep all complaints

received by them as strictly confidential from the employer or his representatives: in

tenm, of Section 32. if the Labour Inspector finds any contravention of the Code.

then. he shall send a report thereon, to the Director of the Labour Office. for

necessary action. In a later section, we shall be setting out the extent of \ ariation

betvoeen the Code and the ground realities; at this stage, it is sufficient to state that.

most respondents in the field survey had said that according to them. the

Govemment did not play any visible role in the regulation of labour market. Section

40 stipulates that no person shall act as an employment agent unless he has been

authorized to do so by the Deputy Minister of Labour and is in possession of an

annual I icense. Section 4 I states that no labour contractor shall demand or accept

from any employee. any material reward for providing the employment We have

already noted in an earlier Chapter that employment agents both in India and S.

Arabia exploit migrant workers. especially, those belonging to low-skill categories.

It is notable, that no penal provision is made, for any breach of Section 41 .

g) Employment of Aliens

Sections 48 to 50 deal with Employment of Aliens. Section 48 says that work is the

right of every Saudi national; citizens of other countries would not enjoy such rights,

unless they abide by and follow the provisions of this Code. Section 49 says that no

alien may enter the Kingdom to work or be permitted to work except with the

approval of the Minister of Labour, and after obtaining a work permit as per the

105

authorized procedure. The section further stipulates the conditions which must be

satisfied. before a work permit may be issued, which are:-

(i) The alien had entered the country lav.rfully and should have satisfied the

conditions prescribed in the regulations for residence;

(ii) The alien possesses the vocational skills and educational qualifications of

which the country is in need. on the condition that Saudi nationals possessing

such qualification, are either lacking or not adequately avanable;

(iii) The alien shall be under the contract with and guaranteed by a Saudi

employer, or a non-Saudi employer, who is so authorized.

There is a convenient loop-hole in (ii) above: it does not provide for the eventuality

of a Saudi national not eager to take up a jobs; e.g., most migrants in semi-skilled or

worker/labourer category, are not substitutable by Saudi nationals. as they are

unwilling to take up jobs which involve rigorous physical labour: hence. for this

sector. there is no pressure for Saudiaziation of the work force.

h) Training of Saudi Employees and Saudiaziation

Section 50 provides that every employer shall train his Saudi employees in such a

way that. over a period of time, they may replace non-Saudi nationals. Every

employer is also mandated to keep a record of all instances, where Saudis have

replaced non-Saudi nationals. This provision may appear prima facie to be a great

aid at the Saudiaziation effort, but. if we analyze it, it does not reveal too much: let

us presume that a Saudi employer is very keen to implement the provisions of

Section 50, and would want to replace non-Saudi workers with Saudis. What is he

excepted to do? Say, out of 25 workers, there are 10 Saudis and 15 non-Saudis: he

trains h:ls Saudi workers to replace a non-Saudi; chances are that. despite this

training, the non-Saudi worker would still be better than the Saudi worker because.

the non-Saudi worker would be cheaper than Saudi worker, so, his profits decline, to

the extent of higher wage now payable; with low participation rates, it may be that

the replacement for the Saudi worker, may be a non-Saudi; so, he is back to his

original ratio. Obviously, something more than the provisior~s of Section 50 would

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be required to effectively enhance Saudiaziation of the work force. Section 80 gives

a legal basis to the Governments' Saudiaziation programme; it says that except for

the consideration of the need to attract alien or migrant workmen. the employer is

forbidden to pay \Yages to migrants in excess of those paid to Saudis. of equal

competence. technical proficiency and academic qualification. Whilst the stipulation

here is that Saudi and non-Saudis shall get equal wages, we have seen in an earlier

chapter that, every thing being the same, a Saudi earns nearly 50% more than a non­

Saudi. for the same work. In effect, this section is attempting to address a problem,

which in fact, does not exist.

i) Contract of Employment

Chapter IV deals with the contract of employment. Section 70 defines a contract of

employment as a contract concluded between an employer and employee. whereby

the latter agrees to v-;ork under the direction or control of the employer for a specified

or unspecified period in consideration of a wage, or for the performance of a

specified job. and which contains the agreed upon tern1s and conditions. It is seen

that this is a minimalist definition. It does not specify any ingredients of a valid

contract and therefore. we are none the wiser about a valid and legal contract in spite

of this section. It is possible that such cryptic formulations would render the

definition inadequate. and, make it subject to facile interpretation and detern1ination.

However, Section 77 enumerates the necessary ingredients of a contract of

employment. They are:- (i) the contract must be in writing, drawn up m Arabic, and

in duplicate - each party keeping one copy; (ii) if the contract of employment is not

in \\Titing. a contract shall be deemed to exist, so that the employee may. by any

proof. establish his rights; (iii) either party may at any time demand that the contract

be reduced in wTiting; (iv) if any employee is employed by the State or public . . u~, .

bod1es. then. the cmwr of appomtment shall supercede the contract. It is thus seen

that the section is, prima facie, extremely prejudicial to the interests of migrant

workers, i.e., such of those who do not know Arabic-which is the large. over

whelming majority; the law contemplates that a worker shall execute a contract the

contents of which, are unknown to him. His only safeguard lies in the event that the

contract is bi-linguaL i.e., in Arabic and English in which case the Arabic version

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shall take precedence. We have already noted in an earlier chapter. that many

uneducated migrant workers are cheated by their employers, because, they are

unaware about the contents of the contract; one reason for such happenings is now

f1·,r·h clear.

Section 72 says that a contract of employment concluded for a specified period shall

tenninate upon the expiry of the term. If both the employer and employee continue

to enforce the contract thereafter, it shall be deemed to have been renewed for an

unspecified period. The implication of this provision is that, a specified period

contract could become an open-ended contract. if it is continued after the specified

period has elapsed. It is presumed that in such an event, the earlier terms and

conditions shall remain operative.

j) Remedies against Wrongful Dismissal

Section 75 deals with the procedure to be followed by an employee who is dismissed

for no valid reason and seeks an injunction against it. The section stipulates that an

application should be submitted to the Director of the Labour Office. having

jurisdiction of area where the place of work is located, within a period of fifteen days

from receipt of notice of dismissal. On receipt of such an applJlcation, the Director of

the Labour Office shall take necessary steps to settle the dispute amicably. The

section does not specify what steps shall be taken by the Director. to settle the

dispute; this is a gross inadequacy in the dispute settlement mechanism provided in

the Labour Code. The Section further provides that, in the event the Director is

unable to get the dispute settled amicably, he shall refer the dispute to the appropriate

Labour Board. Within three days of receipt of the reference, the Labour Board shall

fix the first hearing, and, then, finally decide the matter within two weeks, thereafter.

This in effect implies, that the Labour Board shall decide the matter within thirty

three days; the decision of the Labour Board shall be final. Having decided the issue

of injunction on dismissal, the Labour Board is given, a further period of one week,

to decide the basic issue, i.e., the legality of the order of dismissal. The section

defines, what shall constitute a dismissal without valid reason as: - (i) it is

established that the order of dismissal followed the employees' demand for

legitimate rights; (ii) when dismissal is consequent upon the refusal of the employee

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to accept an order of transfer, (iii) when it is not considered to be bonafide, or (iv) is

prejudicial to the interests of the employee. It must be said that this narrow ambit

\Vithin which validity of a dismissal order operates against the employee. as the

inclusive definition is extremely restrictive. In other words, to prove the validity of

an order of dismissaL an employer needs to ensure that, only the above aspects

mentioned above. are not proved, and then, every order of dismissal could be held to

be a valid order of dismissal.

Section 79 says that a monthly rated employee cannot be re-classified as a weekly.

hourly or piece-work rated employee unless the employee concerned. agrees to do so

in writing, and without prejudice to his rights as a monthly rated employee. The

section further pro\ ides that except in cases of temporary necessity and depending

upon the exigencies of work, no employee shall be compelled to \Vork which is

different from the \Vork contracted for, unless the employee agrees to do so in

\\Titing. \Ve have already noted instances where, migrant workers have been

compelled to do work different from what was contracted. Obviously. this section

does not have strict enforcement.

k) Compensation to be paid by employee for loss etc.

Section 81 is a punitive provision which seeks to compensate the employer for the

loss that he may suffer because of the acts of omission or commission of the

employee. The section provides that if an employee causes loss, damage or

destruction of materials, machinery or products, which belong 1:0 the employer, or are

stored in his premises. because of the employees' fault or contravention of

instructions. the employer may with-hold the amount required, to restore the loss.

from the employee's wages, provided, such amount does not exceed more than five

days wages. each month. As no mechanism is provided to ensure that the employer

acts reasonably in fixation of the loss (e.g., no independent surveyor, etc.), the

employee is empowered to appeal against the amount fixed by the employer, to an

appropriate Board, whose decision, shall be final. It is to be noted that what the

employee can appeal against is the quantum of damages fixed by the employer, and.

not the basic action of the employer, of fixing responsibility on the employee.

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I) Grounds of Termination of Contract

(A) By Employer: ~

Section 83 says that the employer shall not terminate the contract without

termination award, advance notice or indemnity, except in the following cases,

provided he issues a "show cause" to the employee, to explain his case:-

1) if, in the course of employment, the employee assaults his employer or

supervisor/s;

2) if the employee fails to obey legitimate orders, even in writing. issued by his

employer;

3) if the employee is proved guilty of bad conduct or an offence against morality

or honour;

4) if the employee has caused deliberate material loss to the employer, provided

the latter reported the incident to the appropriate authority. within twenty four

hours from the time he becomes aware of it:

5) if it is proved that the employee resorted to fraud to obtain employment:

6) if the employee is on probation;

7) if the employee absents himself without valid reason for more than twenty days

in one year or for more than twenty days in one year or from more than ten

consecutive days: provided that the employer shall giw written notice of the

absence to the employee, after ten days in the first instance and five days in the

second instance;

8) if it is proved that the employee left the hospital where he was undergoing

treatment, without the permission of his supervisor; this shall. however. not

debar him from seeking due benefits available to him under the Social

Insurance Act;

9) if it is proved that the employee has divulged secrets of the work in which he is

engaged.

It is seen from the above that, a very wide range of eventualities are provided for. to

enable an employer to terminate the contract of employment without termination

award, advance notice or indemnity; it is difficult to add any other items to the above

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list: it appears surprising though. that assault of fellow workers is not provided for.

unless, item 3) above is deemed to include that also.

(B) By Employee

Section 84 provides for the premature termination of the employment contract by the

employee, in the following situations:-

1) if the employer has not fulfi !led his obligation towards the employee;

2) if the employer required the employee to do work which is different from the

work originally contracted for. or if the employer transfened the employee to a

place necessitating change of residence, which is to the prejudice of the

employee. and. without valid reason dictated by the nature of work;

3) if the employer or his men assault the employee or commit an immoral act

against the employee, or any member of his family;

4) if there is a serious hazard threatening the employee's safety or health, subject to

the condition that the employer is aware of such hazard, and has not done

anything about it

5) tf the employee \vas misled by the employer or his representative at the time of

making the contract;

6) if the employer through his action has compelled the employee to terminate the

contract.

We have noted in an earlier chapter that, migrant workers are interested to remain in

Saudi Arabia . as long as they can. and also, that they camtot change their jobs.

without the consent of their employer. In that context, the provisions of Section 84

appear to be \ ery theoretical, and many provisions of Saudi labour laws exists. onh

to satisfy external agencies - this could be a prime example of that.

Section 86 states that ifthe employee's service is terminated, or comes to an end. the

employer shall return to him all that he has deposited with the employer. As we have

noted earlier the employer retains the passport of all migrant workers, it is obvious

that it must be returned. at the cessation of employment. Further, the employee is

entitled to rece1ve. free of charge, a certificate from the employer giving details of

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employment, etc.; if the certificate contains anything prejudicial to the employee.

then reasons for the same have to be cited.

We have earlier noted that one of the attractive components of the wage package in

Saudi Arabia is a bonus payable at the cessation of the contract period. Section 87

states that where a contract of employment for a specified period comes to an end at

the close of the period. or where the employer cancels a contract of unspecified

duration .. the employer shall pay to the employee a length -- of -- service bonus

computed at the rate of half month's pay for the flrst five years and one month's pay

for each of the subsequent years. For e.g., if an employee works for an employer for

ten years, and his last pay was 2000 SR, then, an amount of 15000 SR will be

payable as bonus. The last pay drawn would be the basis of calculation. The

quantum of bonus payable, in the event the employee resigns under a contract of

unspecified duration, is determined by Section 88. It says that where an employee

\\ orkers for at least two consecutive years, but less than five years. he shall be

entitled one--third of the bonus provided for in Section 87; if employment is for a

duration between five year and ten years, he shall be entitled to two-thirds of bonus

provided for a in Section 87, and, if period of employment exceeds ten years. then.

he shall be entitled to full bonus. It would be obvious, that, as usual. a premium is

put on the employee, if the wants to leave his employer, before the expiry of ten

years, he shall not be entitled to receive full bonus.

m) Obligations of the Employer

Sections 91 to 95 (both inclusive) deal with the obligations of the employer. Section

91 stipulates that, in addition to what may be provided in the Code, the employer

shall:-

i) treat his employees with due respect and refrain from any vvord or act that

may affect their dignity or religion;

ii) facilitate any task of the officials of the appropriate authorities relating to

the inspection, control or supervising the implementation of the

provisions of the Code;

iii) grant the employees the necessary time to enable them to exercise their

rights provided in the Code;

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We have already noted that Saudi Arabia does not permit practice of any religion

besides Islam; therefore, the provision of not affecting religious sentiments provided

for in as above, is merely a form of tokenism.

Section 92 stipulates that the employer shall pay wages to his employees, as

contracted; it is notable, that no penal provision exists, which could be invoked in the

event of breach of this section. Section 93 states that if the employee reports for

work and is \Villing to perfom1 the same, but is prevented from doing so by the

employer, then, the employee shall be entitled to wages for that day. Section 94

stipulates that the employer, his agents or supervisors, shall take every precaution to

prevent the entry of legally prohibited substance to the workplace, and, any one who

is in possession of such substance or has consumed it, shall be liable for legal and

administrative penalties. This is of course. an euphemism for the ban on

consumption of drugs and alcohol in the Kingdom; it is again to be noted that the

liability of the employer is restricted to taking precaution to prevent entry of such

bam1ed substances - beyond that. he is not liable. Section 95 states that every

employer who employs ten or more employees, shall be given service card bearing

full details of the employee; this means that domestic workers. and those working in

establishments which employ less than ten persons shall not be liable to receive such

cards.

n) Liabilities of the Employees

Sections 96, 97 and 98 deal with the liability ofthe employees. Section 96 states that

in addition to the obligations provided for in the Code, the employee shall be liable

for the following:-

i) perform the work assigned to him in terms of the contract, under the

employers' control and direction and instructions, provided instructions are

not prejudicial to public morals and they do not expose him to any dangers;

ii) return to the employer any un-consumed materials and take adequate care of

the machine and tools placed at his disposal:

iii) observe good conduct and behaviour during work; [notable that good conduct

at other times is not a fundamental requirement].

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iv) extend every help and assistance without demanding additional pay, if the

work place or workers are threatened by disasters;

v) submit at the employers' request to any medical examination, to ensure that

he is free from any occupational, communicable or incurable diseases; [what

are the consequences for not acceding to the "request" of the employer is not

clear: however. Section 83 (2), would in all probability be invoked by the

employer]:

vi) safeguard the operational secrets of the employer;

Section 97 stipulates that the invention by an employee, whilst in servrce of an

employer shall be the right of the employee, unless, the work contract provided for

this: if the invention has an economic value, then, the employee shall have a share in

it. in the principles of equity. Section 98 stipulates that the employee shall use the

safety equipment designated for each operation.

o) Protection of Wages

Chapter VI ofthe Code, consisting of sections 115 to 127 (both inclusive) deals with

protection of wages. Section 115 empowers the Council of Ministers, on the

recommendation of the Minister of Labour. to determine ':he mmrmum wages.

\vhether in general, or for any specific area or occupation. Section 116 stipulates the

manner and periodicity of payment of wages. It provides that wages shall be paid in

Saudi Riyal, and shall be paid on weekly basis for all daily - rated and piece-rated

\Vorkers; for monthly-rated employees, wages must be paid once a month. Section

117 states that. on termination of employees' service, his wages should be paid

immediately; however. if the employee leaves the employment on his own accord,

then. his wages must be paid within seven days, thereof. Section 118 stipulates that

the employer has the right not to pay wages or any amount due to an employee.

unless the employee signs a special register provided for the purpose.

Section 119 says that no deductions may be made from an employees' wages m

satisfaction of private debts or rights, except in respect of the following: -

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i) to recover advances or any amounts paid in excess of \Vhat is due; provided

that such recovery should not exceed I 0% of the employees· wages;

ii) social insurance premia payable by the employee;

iii) the employees' contributions to the Savings Fund. or amounts due to the

Fund;

iv) house-building loan advances:

v) fines inf1icted upon the employee for offences committed under Section 126

or Section 81;

vi) any debt to be recovered on account of any decree of a court, provided that

such recovery shall not exceed one-fourth of the employees· salary.

It would be seen that the recoveries provided for are either statutory dues. or personal

dues, or arising out of decrees of courts; the section also ensures that a reasonable

percentage of the employees· salary is protected. and that an unusually heavy burden

is not imposed on him. This provision is further reinforced by Section 120 which

says that the sum total of all deduction. under Section 119 should not exceed fifty

percent, or if found necessary by the Board, then, it should be limited to twenty five

percent only.

Section 121 states that if any amount is deducted from the salary of the employee for

a reason other than those specified herein-above, or withoul his consent, or the

employer delays in making payment of wages, the employee or his representative or

the appropriate Labour Office may move an application before the appropriate

Labour Board, so that it may order for appropriate relief; if the Board comes to a

finding that the employer has unjustitlably deducted money from the wages, then, it

can be ordered that a fine upto double the amount of deduction made, or, double the

outstanding wage may be imposed on the employer. We have noted in an earlier

chapter that most migrant workers are unaware of the Governments' regulatory role

in the labour market, chances are, that provisions such as these. may not be in the

knowledge of the migrant workers, and therefore. do not sen·e any useful purpose.

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Section 124 stipulates that the following shall be deemed to be part of wages:-

i) commission paid to travelling salesmen and commercial representatives;

ii) percentages paid to salesmen. and cost-of-living allowances:

iii) any grant made to an employee for honesty etc., if such amounts are part of

the contract.

We have seen in an earlier chapter that many migrant salesmen who were

interviewed by this writer, reported that they received commissions on the sales

made by them: some of the salesmen who were interviewed said that they were not

interested in any promotion, as, it would mean loss of such commission.

p) DraH.!ing up a Set of Rules

Section 125 stipulates that in an establishment employing twenty or more persons.

the employer shall draw up a set of rules covering penalties and rewards and the

conditions as to hO\\ they shall be governed. Those rules must be submitted to the

Minister of Labour for approval: if the Minister does not accord his approval to the

rules submitted by an employer, within two months of their receipt. then, they shall

be deemed to have been approved by him. The Minister is also empowered to issue

standard rules in this regard, which may be adopted by employers. The section

further provides that no employer shall impose any penalty, for an offence, which is

not listed in the rules. It is further provided that no employer shall impose a fine on

an employer which exceeds five days wages, or suspend him without wages for more

than five clays. for a single offence. Protection against double jeopardy is also

provided in the section. We have noted in an earlier chapter that. when expatriate

workers were asked whether their terms and conditions of service were governed by

written rules. most respondents had answered in the negative. This indicates that the

provisions of this section, are not seriously implemented. Section 126 states that no

employee shall be charged for a offence discovered more than fifteen clays earlier -

i.e., the charges must be laid out with fifteen days of the offence coming to the notice

of the employer: section 127 stipulates that all fines recovered from employees, must

be entered in a special register; this may have been provided to that Labour

Inspectors may verify this aspect, during their inspection.

l\6

q) Health and Welfare Measures

Chapter VII of the code deals with protection and social services and covers sccttons

128 to 144 (both inclusive). Section 128 stipulates that every employer shalL at his

own cost., take necessary precaution for the protection of his employees from hazards

and diseases arising out of the work and machinery used. and for employment

protection and safety.

responsibilities: -

Section 129 enjoins upon the employer. the follcming

i) the establishment shall be kept clean and in a sanitary condition:

ii) work rooms in the establishment shall be ventilated;

iii) necessary precautions should be taken to protect the employees from injuries

resulting from gas, dust, smoke etc;

iv) the establishment must be adequately lighted during working hours;

v) water closets shall be provided which are easily acce~;sible. and, one "'·ater

closet for not more than fifteen employees must be pro\ ided:

vi) adequate provision for drinking water shall be made;

vii) adequate supply of water and washing facilities must be available to the

workmen;

[Being a desert State, water is a scare commodity in Saudi Arabia]

Section 130 stipulates, inter alia, that every employer must inform each employee on

his taking up employment of the hazards involved in the said occupation. Section

132 states that the employer shall be responsible for incidents and accidents which

may cause injuries to persons other than his employees (emphasis added), if the

injury is caused by his failure to take necessary safety measures: it is to be reiterated

that, such compensation, as may be paid to outsiders, is not available to his own

employees. Section 134 stipulates that every employer shall make available first-aid

and medical facilities in accordance with the standards set by the Minister of Labour

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and Minister of Health. If the number of employees exceeds fifty, then, the

employer shall employ a nurse and assign a physician - all this shall be free of

charge. If the number of employees exceeds hundred, the employer shall make

available additionally, the services of specialists. etc; if operations are performed,

then, the expenses shall be defrayed from the Social Insurance Fund; the section

however also says that the costs of treatment, medicines and hospitalization in

Government and charitable hospitals shall be borne by the parly. as may be decided

by the Minister of Labour in consultation with the Minister of Health or in

accordance with the rules laid down in the Social Insurance Act. This means that

though some medical facilities are available to employees free of cost, for some

others, they may have to bear the expenses. in full or in part.

In terms of Section 135. every employer who employs more than fifty workers shall

inform the appropriate Labour Office. the name of the physician who is designated to

treat his employees; in case more than hundred employees are employed, the

employer will have to intimate the names of physicians, specialists and the hospitals,

where his employees may receive medical treatment. Section 13 7 stipulates that if

an employer employs fifty or more employees, then, he shaLl establish for them a

savings and thrift plan approved by the Ministry of Labour; provided that it shall be

optional for the employees to join the same. It is also provided that the employer

shall provide rest and recreational facilities in accordance with the specifications

issued by the Minister of Labour. We have already noted in c:m earlier Chapter, the

difficult conditions in which migrant workers live and survive, putting paid to the

stipulations contained in this section. The section further says, that, in case an

employer employs 500 or more employees. then, the Minister of Labour may decide

after taking into consideration all relevant factors. that the employer shall do at his

expense, all or some of the following :-

i) Provide shops for the sale of food. clothes and other necessities at the '

workplace, at reasonable prices;

ii) Provide parks and play fields;

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iii) Make suitable arrangements for the health of employees and their

dependents:

iv) Provide schools for the education of the dependents of workers. if the: are

otherwise not available, and to provide mosques at the workplace:

v) Set up a programme to control illiteracy among the employees:

vi) Prepare rules approved by the Ministry of Labour for the appointment and

promotion of employees.

Whilst these stipulations, which though are not wholly mandatory. are \ ery

beneficiaL they would in effect, serve a limited purpose because. the threshold llmit

of five hundred employees, is greatey in excess; in the labour market. there would be

a limited number of establishment employing more than five hundred employees.

and. even otherwise, the employers could circumvent the provisions of this section.

by employing less than five hundred workers. If the Government '"as genuinely

interested in providing such beneficial measures to workers. including migrant

workers, the limit should have been kept at a much lower level, e.g .. one hundred.

r) Responsibility of the Principal Employer vis-a-vis Immediate Emplo_ver

Section 138 stipulates that in case an employer entrusts some of his jobs to

contractors. then, the contractor should be made liable for all the obligations, which

would otherwise would have been the responsibility of the principal employer. By

virtue of Section 139, employees of contractors would be eligible to receive all the

benefits and facilities which are available to the employees of the principal

employer. Consequently, Section 140 states that the principal employer shall be

liable for the acts of the contractors, and could, therefore indemnify themsch·cs

against the contractors, by withholding appropriate amounts of money. Section 142

stipulates that conveyance shall be provided by every employee we have already

noted that this facility is invariably provided. Section 143 makes special provisions

for workers who either work in remote places, or those working in mines. petroleum

industries: in respect of such workers, the employer shall :-

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i) provide residential accommodation, including those meant for married

workers; the specification etc. for such accommodation shall be determined

by the Minister;

ii) provide three meals a day to his employees, at the place designated for this

purpose, which shall be served hygienically; the type of food and the cost

shall be determined by the Minister: provided that meals cannot be

substituted by cash allowances;

iii) provide medical, social and cultural services which shall be determined by

the Minister;

iv) where workers are expected to live in camps. the employer shall provide free

meals (three) and drinking water and living accommodation:

v) in special cases, where on the recommendation of a physician, any special

food is to be provided to an employee. and the employer is unable to do so.

then, the employee may demand a cash allowance. in lieu thereof.

In this section. no threshold limit for number of workers employed to make the

above benefits available has been provided for: therefore, an inference is drawn that

these have to be provided irrespective of the number of workers employed; in such

an eventuality, it is quite possible that employers employing lesser number of

workers, may find these conditions not viable and may try to avoid providing these

facilities. Section 144 states that wherever fifty or more employees are employed.

then, a nurse with creche has to be provided for the children of female workers who

are below six years of age.

s) Working conditions and Annual Vacations

Chapter IX of the Code deals with hours of work, weekly rest and vacation leave.

covering Sections I 4 7 to 158 (both inclusive). Section 14 7 stipulates that no

employee shall be employed for more than eight working hours every day, or forty

eight hours per week, with the exception that during the month of Ramzan, actual

working hours shall not exceed six per day and thirty six per week. The duration of

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work prescribed here is exclusive of time kept aside for prayer, rest and meals. In

establishments like restaurants. hotels. snack bars. etc., workers may work up to nine

hours per day. In certain categories like hazardous industries, the working hours

could be reduced. as per the instructions of the Minister of Labour. In terms of

Section 148, working hours should be scheduled in such a way that no employee

should work more than five hours at a stretch without a break for rest. prayer and

meals. which \Vould be half-hour for each, i.e., one hour and half, totally. The

section also provides that no employee shall be at the workplace for more than

eleven hours in a day. For example, an employee works for five hours from the

commencement of business hours: he then avails a break of one and a half hours for

rest prayer and meals; then again works for the balance of three hours; in sum. he

would be in the workplace for nine and a half hours each day. How the rest etc ..

would be provided for in the event of working over-time which most migrants tend

to do. is not provided for. In terms of Section !50. ordinarily, Friday shall be the day

of v·:eekly rest; provided that with consent of the appropriate Labour Office. the

weekly rest day could be changed. subject to the condition that employees are able to

perfom1 their religious duties. The efficacy of these sections would be judged from

our findings recorded in an earlier Chapter, where, we have shown that there are

instances where migrant workers work for up to twelve hours every day. seven days

a week.

Section !50 states that the provision of Section 147, 148 and 149 shall not apply m

the following instances:-

i) annual stock taking, finalization of accounts, liquidation, preparation for festive

season, etc; provided that the number of days on which the employee works

beyond the fixed daily hours, should not exceed thirty days in a year;

ii) emergency work, related to accident, etc;

iii) \vhere work is designed to cope with unusual work pressure;

iv) holidays. festivals. etc., to be decided by the Minister of Labour.

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In all such cases, the number of hours shall not exceed, ten hours per day. For b) and

c) above, a report must be sent to the appropriate Labour Office. Section 151

stipulates that the employer shall pay to the employee at the rate of one and half

times, for the period of overtime work. Where an employe,.? works on a weeki)

holiday or festive day, he shall be paid at the over time rate for the duration of work

It is noted that the Code does not specify the limit upto \Vhich an employee may

work overtime: therefore, it is possible to perpetuate the prevalent system. where

migrant workers work for long duration, because of the attractive monetary benefits.

inter alia

Section 153 states that every employee who has completed one year of service, shall

be entitled to an annual vacation of fifteen days with full wages. This duration shall

be increased to twenty one days, if the employee has worked for ten years. The

employee may defer his vacation \Vith the approval of his employer It is therefore

common to find Indian migrant workers coming on vacation for one month. every

alternate year. Section 157 forbids an employee, on vacation. within the meaning of

Section 153, to work for any other employer during that period. Section 154 states

that the employee shall be entitled to avail the unused portion of leave. if he leaves

the employer's service, without doing so. Section 155 states that an employee shall

be entitled to upto ten days of paid holidays. Section 15X states that an employer

who employs twenty or more employees, shall grant to any duly certified sick

employee, medical leave on full pay for the first thirty days and three-quarters pay

for the next sixty days in a year. Obviously such a facility is not available where less

than twenty employees are employed. Section 159 provides for the grant of three

days leave for marriage and one days' leave if a child is born to him or on the death

of any ascendant or descendent. These leaves shall be on full pay.

t) Labour Disputes Boards- Constitution, Powers

Chapter XI deals with Labour Disputes Boards, covering Sections 172 to 188 (both

inclusive). Section 172 provides for the establishment of the Primary Labour

Disputes Board [PLDB] and a Supreme Labour Disputes Board [SLOB]. The

Constitution of PLDBs is governed by Section 173 which says ~hat at every main and

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branch Labour Of11cc in the Kingdom, a PLOB shall be constituted, by a decision of

the Council of Ministers based on the recommendation of the Minister for Labour.

The PLDBs shall consist of three members, who shall be experienced in legal

matters. The Chairman shall hold a degree in Shariat, and atleast one of the other

two members shall hold a degree either in Shariat or in law. Our introduction to

Shariat at the beginning of this Chapter, would be clear in its intent now. Section

174 deals with the jurisdiction of the PLDBs. In the final instance, the PLOBs shall

decide labour disputes. the value of which does not exceed 3000 SR. and disputes

relating to the stay of orders of dismissals of employees and, disputes relating to the

imposition of fines or requests for exemptions from such fines. The PLOBs shall

have jurisdiction of the first instance in respect of labour disputes the value of which

exceeds 3000 SR, and disputes pertaining to occupational injuries and disputes

pertaining to termination of service. It IS thus seen that the PLOBs have both

original jurisdiction and final jurisdiction.

Section 175 deals with the fom1ation of the SLOB; it says that the Council of

Ministers shall constitute a SLOB, consisting of five members; three members would

represent the Ministry of Labour and Social Affairs, one representing the Ministry of

Commerce and Industry and one representing the Ministry of Petroleum and Natural

Resources. One of the members, whose civil service grade shall not be below Grade

IL shall be designated as the Chairman of the SLOB. The section further provides

that all the members shall be impartial and experienced in legal matters. Section 176

gives powers to the SLOB to render final orders on all disputes referred to it on

appeal, and shall be competent to impose, on guilty persons, fines as provided in the

Code. The rules of procedure of SLOB and PLOBs shall be decided by the Council

of Ministers. Section 178 states that the PLOBs and the SLOB shall render their

decision by majority and their decisions must be conveyed by speaking orders. The

orders must be signed by all members, with dissenting mem ber/s recording their

reasons for dissent.

Section 179 gives exclusive powers to these Boards to examine disputes relating to

all contracts of employment, and, for this purpose, they may summon witnesses, and

examine them; they may call for documentary evidence and adopt any other

1)' _ _)

measures deemed necessary. The Boards shall also have the right to inspect any

premises deemed necessary, in accordance with the provisions of the Code. Section

180 says that suits should be filed before the PLDB within whose jurisdiction the

workplace is located. and the Board shall give its decision in terms of the provisions

of Section 177. An appeal to the SLDB must be filed within thirty days of receipt of

the order to be appealed against. In terms of Section 182. if appeal against an order

of the PLDB is not filed within the limitation provided, then that order shall become

final, as is the case with all decisions of the SLDB.

Section 183 states that in all cases, parties to the dispute may agree by mutual

consent to appoint one arbitrator or more for each party so that the dispute may be

settled by arbitration, rather than though the Labour Boards. If the arbitrators are

unable to select an umpire themselves, then, the Chairman of the PLDB within

whose jurisdiction the workplace falls, shall appoint the umpire. It is not clear as to

who or how the PLDB shall be approached. The arbitration agreement shall indicate

its procedure and the time frame to be followed. The arbitrator's award is akin to the

order of the PLDB's. in as much as, it may be appealed against before the SLOB.

unless the agreement expressly provided that the award would be binding on all the

parties.

Section 185 states that no Labour Board may abstain from rendering any decision on

the ground that the Code does not have the necessary provisions to decide the

dispute; in that event, the Board shall be guided by the principles of Shariat. local

rules. precedents, principles of justice, usage and equity. By Section 186, the

principle of res judicata is invoked in respect of labour disputes. In terms of Section

187, during the pendency of proceedings, no employer shall change the terms and

conditions of service, to the prejudice of the employee. In terms of Section 188. in

the absence of a particular PLDB, another PLDB may be given jurisdiction over the

said area.

u) Miscellaneous Provisions

Chapter XII of the Code deals with penalties and comprises Sections 189 to 208

(both inclusive). Section 189 provides stringent penalties against acts of strike. It

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says that if a person conspires with any group of persons with the purpose of

stopping means of transportation, or postal, telegraphic, telephonic communication

or any public utility service, then, he shall be punished by imprisonment for a term of

one month extendable upto a year and by a fine of 1000 to 3000 SR. Sub-section (2)

states that the same penalty shall be imposed on the agent of any of the said utilities,

if he ceases work without legitimate cause. Sub-section (3 ·, stipulates that if the

cease-work is accompanied by threat of intimidation, or propaganda, or public

gathering or occupying the workplace, then the penalty shall be imprisonment from

1 000 to 5000 SR. Section 190 imposes a heavy penalty of imprisonment from one to

three years or a fine of 1000 to 5000 SK for a person who encourages others to

strike work.

Section 191 contains penal provisions in respect of employers, heads of enterprises

or employees, who stop work as a measure of protest; the penalty provided for in

such an event would be imprisonment for a period of two to six years and/or fine of

400 to 1000 SR. Section 196 states that any person who violates the rules regarding

employment of aliens as contained in Section 49 of the Code, shall be punished with

a tine of 500 to 1000 SR. for each alien employed by him. Sections 197 - 207 (both

inclusive) provide for penalties for violation of various provisions of the different

sections of the code.

Chapter XIII consisting of Sections 209 to 211 (both inclusive) deal with final

provisions. Section 209 stipulates that the Minister for Labour shall issue decisions

and rules, wherever the Code authorises him to do so, for the implementation of the

Code. Section 210 repeals the earlier extent provisions contained in the Labour and

Employed Persons Regulations of 1 01h October 194 7.

v) Observations

\\'hat does the Labour Code mean to the migrant worker? In our foregoing analysis

we found that the Code. though containing some very noble considerations, is not

adequate to meet the requirements. The basic deficiency of the Code appears to be

that very minimal penal provisions are stipulated for breach of the Code by the

employers. Another deficiency is that, very often. the stipulatwn is kept vague, and,

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therefore. it is not possible to state with certainty. whether. the provision IS

implementable at all. or not. Thirdly, we find that the worker is always in a

disadvantaged position. because. his main consideration is not rights or benefits. but

wages; it is probable that, if he continues to receive his monetary benefits. he is

likely to forego some or most of his rights and non-monetary benefits. In effect. the

Labour Code could be said to be, a weak attempt by the Saudi Government to imitate

some liberal countries, or international standards - to remain on paper, for little

satisfaction of the migrant worker. The reality will get further accentuated when. in

a later Chapter. we shall identify. what protection would have been available to the

migrant worker, had he remained in India, and, got gainful employment in the formal

sector. This may be part of the problem - the Government which should be the

regulator. gets involved in the labour-management facilitation process; possibly. it

would have been better to keep the roles distinct; when the Government's beneficial -

prolabour role will conflict with economic consideration, the latter will most

possibly prevail.

4.4 EMPLOYMENT REGULATIONS OF NON-SAUDIS lN PUBLIC SERVICE

a) Features of Employment Regulations

The Saudi Government promulgated a Royal Decree number M/25 of 1975. which

governs the employment of non-Saudis in Public Service. Article 1 of the

Regulations states that the employment of non-Saudi in the Public Service of the

Kingdom shall be effected pursuant to a contract concluded in conformity with the

provision of these Regulations, except in the case of persons employed in the armed

forces and persons who are employed in terms of the Code. Article 2 states that the

provisions of these Regulations would apply to all contracts of employment, which

are in excess of one year's duration, which are concluded by various Ministries.

Authorities and other Government authorities; in other words, we may state that

whereas the Labour Code applied to private employers, these Regulations applies to

Government authorities.

Article 4 says that all appointments shall be subject to the condition that (i) provision

for the post has been made in the Budget, though this may be overruled, by the

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Ministry of Finance: (ii) a job description for the post is made; and (iii) verification

by the Secretariat that no Saudi national is available or likely to be available for the

post. In the Labour Code we have examined the provision of Section 49(2) that says

that an alien may be employed, provided a Saudi national of equal competence is not

available; the Government has given itself similar powers to employ aliens. Article

5 lists the basic requirement which have to be fulfilled by alien workers, which

includes - age between 20 and 60 years, medical fitness, requisite qualifications, etc.

Article 7 stipulates that the contract would be in terms of Annexure I of these

Regulations (this would be examined towards the end of this section]. Article 8

states that the contract could be for one, two or three years, and be renewable. It is

significant that, in terms of Article 9, the contract shall commence, if necessary, on

the date on which it is executed, even if it is done in a different country, provided the

employee shall not take more than three days to join his employment in the

Kingdom. It is indeed noteworthy that, in the Government sector, the contract

commences immediately, on its execution.

b) Provisions regarding Salaries, Holidays

Article 11 stipulates that the salaries shall be determined on the lines of the model

salaries set out in the various tables, as annexures to these Regulation. The article

then lays down what special consideration, etc. shall be made whilst fixing salaries,

for different categories of specialists. Article 15 states that if the salary of an alien

cannot be worked out on the basis of Article 11, then, it shall be fixed by the

President of the Secretariat, who shall be advised by the Vice-President of the

Secretariat, the Under Secretaries of the Ministry of Finance and the concerned

Ministry. Article 17 interalia states that the salary of an alien worker cannot be

attached, unless ordered by a legally competent authority; and, except alimony, the

amount attached every month may not exceed half the net monthly salary of the

employee. Article 18 states the Ministry shall provide to the employee and his

family [not exceeding three members], air tickets at the commencement of the

contract, during annual leave; and, when the contracted is concluded, provided that

the contract was for a period not less than two years.

127

At1icle 23 states that the Ministry shall pay to the employee a housing allmvance

equal to three months, provided that it is not below 5000 SR and not more that 12000

SR each year. This allowance is payable annually in advance; provided that if the

Ministry provided furnished accommodation, then, this allowance is not payable.

Article 24 provides for the payment of travelling allowance, depending upon the

salary; this allowance is payable, only if the Ministry does not provide suitable

means of transport. Article 27 stipulates that if the employee is transferred from one

location to another, within the Kingdom, then, he shall be paid, a travel allowance

equal to two months salary, subject to a minimum of 1000 SR and maximum of 3000

SR. Article 28 stipulates that the employee and his family shalL during the whole

term of the contract use the public medical services available to Saudi officials in the

country; this is another area where migrant employees in the service of the Saudi

Government are treated at par with Saudi employees, and, is a beneficial provision.

In terms of Article 29, all migrant employees, in addition to official holidays, be

entitled to 45 days of full-pay leave. We have noted in an earlier Chapter that, in

respect of migrant employees in the private sector, no uniformity exists on the

question of grant of full-pay leave. As a matter of fact, Section 153 of the Code

provides 15 days to 21 days of annual paid leave. Therefore, this is another area

where Government employed migrant workers enjoy a better facility, than those in

the private sector. Article 35 stipulates that a female employee shall be entitled to 45

days full-pay maternity leave. Section 164 of the Code stipulates that a female

employee shall be entitled to four weeks leave before confinement and six weeks

after confinement. However, since this facility is either at half-pay [if employment is

less than three years duration], and, the female employee shall not be entitled to

annual leave for the year she availed maternity leave, on the balance, the position for

Government employees, is on the whole, better.

c) Applicability of Public Service Law

Article 40 (a) stipulates that the migrant employee shall be governed by the provision

of Chapter 2 of Title II of the Public Service Law;8 sub-Article (b) stipulates that if

8 Annexure of Public Service Law is annexed.

128

the migrant employee commits any fault, he shall be dealt with in accordance with

the disciplinary action against Officials Law. In terms of Article 43, the employment

contract may not be renewed, inter alia, if a Saudi national is available for the job.

We have seen that during the field study, one nurse reported that, even though the

Saudi Government recruited Saudi Nurses, they still continued to employ Indian

nurses, because, of the poor quality of Saudi nurses, Therefore, the position of the

Saudi Government on its indegenization policy, is not strictly as per law, but slightly

ambivalent. Article 52 contains special provisions in respect of migrants. It

stipulates, inter alia, that no contract of employment may be concluded with a non­

Saudi whose service was terminated on account of 1mauthorized absence or

incompetence without the prior consent of the Secretariat. No contract may be

concluded with a non-Saudi whose service was terminated as a result of disciplinary

action.

d) Observations

Before concluding our examination of these Regulations, we have to consider and

examine the model employment contract, provided as an Appendix to these

Regulations. The contract is divided in to twenty-one Articles. Article 1 deals with

duties of the employee; Article 2 deals with commencement of the contract; Article 3

states the salary to be paid; Article 4 stipulates the number and nature of air tickets

that shall be provided to the contracting employee; Article 5 specifies the quantum of

housing allowance payable; Articles 6 to 9 deal with leave, including maternity

leave; Articles 10 and 11 deal with rules of discipline; Articles 12 and 13 deal with

termination of contract; Article 14 deals with termination compensation; Article 15

deals with compensation payable on redundancy; Article 16 deals with forfeiture of

rights in case of absence from work; Article 17 states that all dues to the employer,

shall be subject to taxes as applicable; Article 19 deals with appeals; and Article 20

is a deeming provision stating that for any item not covered in the contract, the

matter would be decided in terms of these Regulations.

We have already stated that it is apparent theoretically, and on the basis of feedback

received from expatriate workers during the field study that, the condition of

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Government employed migrant workers is better than those in the private sector. It

is hoped that the above analysis would support this formulmion.

4.5 SUPPLEMENTARY STATUTES

a) Salient Features of Supplementary Status

Having considered the main statutes, it is now necessary to briefly refer to some of

the supplementary provisions. The Model Disciplinary Rules were adopted pursuant

to Resolution No. 119 and amended by Resolution No.115, in 1970 and 1977

respectively. They draw their origin from Sections 9 and 125 of the Code. The

Model Rules Governing Penalties and Rewards are guidelines which are meant to be

followed by employers employing more than twenty workmen. Articles 4 and 5

contain acts which shall be deemed to be act of indiscipline; they include, refusal or

negligence in executing work, unauthorized absence, delay in executing assigned

work, late attendance, disobedience, fighting at the work place. etc. Article 6

categorizes penalties into two types - light penalties and severe penalties. Light

penalties include warning, deduction of a part of a day's wage; severe penalties

include deduction of wage up to five days in a month, termination, etc.

Article I 0 stipulates that no workman shall have a penalty imposed upon him, unless

he is notified in writing of the charges, and an opportunity for defense has been

extended to him. The penalty has to be infom1ed to the workman in terms of Article

11 . The employee also has a right to challenge the penalty before a competent

Commission. Article 16 categorizes rewards into two types. Moral rewards, e.g.

letter of appreciation, etc. and material incentive rewards, e.g. promotion, bonus, etc.

The schedule of penalties and rewards lists various contingencies, wherein, in effect,

only penalties are provided for.

b) Minister of Labour and Social Affairs Resolution

It is necessary to briefly refer to the Minister of Labour and Social Affairs

Resolution No.89 of 6-1-82, which determines the quality of housing which a Saudi

employer has io provide to employees working in remote areas, as determined by

Ministerial Resolution No.651 of 1981. Article 2 of the Resolution states that the

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housing complex must be situated at a distance not less that 1 Kilometre from the

industry which is liable to generate smoke, gases, etc. Article 4 stipulates that

housing for married families and bachelor families shall be distinct and separate -

with distance not less than 1 0 metres between them. Article 6 states that the main

part of the house shall face north and open from the south. and the buildings in each

compound shall adjoin on the east and west to avoid sunlight and to ensure adequate

ventil.ation. Article 7 inter alia provides that each workman should be allocated a

separate bedroom of minimum nine square metres; we have already noted in an

earlier chapter about the difficult living conditions, belying the provisions of this

Article.

Article 8 stipulates that the minimum height of the ceiling should be atleast three

metres. Article 15 stipulates that adequate drinking water from an approved source

shall be provided. We have noted that water is often rationed to migrant workers, to

meet their minimum requirements. Article 19 stipulates that water closet shall not

open directly to the west, but shall be reached via a passageway. Article 25

stipulates that a mosque, rest house, health centre, shopping facilities, etc. must be

provided in each housing compound. Though very detailed and beneficial provisions

in respect of housing is provided for in this Resolution, our observation in an earlier

Chapter indicate a very different reality.

c) Principal Guidelines for the Rules Regulating WorJ~

It is also necessary to refer to the Principal Guidelines for the Rules Regulating

Work.. These include classification and appointment of workmen; organization of

training for new and old staff; wages, allowances, promotions, etc; work schedules,

leave, etc; termination of service; cost of transportation, etc; medical facilities to be

provided to employees, etc; the Guidelines state that every enterprise employing

twenty or more persons, must prepare rules regarding the above, items; the objective

is to ensure that industrial peace prevails in the work place; the items identified

above are not exhaustive, but, only illustrative; eight copies of model rules framed by

the enterprise must be filed with the Labour Office; similar rules for penalties, etc.,

as mandated by Section 125 of the Code must also be prepared. Our field survey

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•"' reveals that despite the existence of such rules, most Saudi business run at the

personal whims and fancies of the employer.

d) The Council of Ministers Resolution

We also need to take note of the contents of the Council of the Ministers Resolution

Number 826 of 1975, titled 'Rules for the Regulation of the Labour Force

Movement.· Article 1 of the Resolution states that all companies and enterprises

shall import from abroad the required number of competent workmen in all areas of

specialization to perfonn the work entrusted to them. Article 2 stipulates that all

companies when entering into a contract with the imported worker, shall specify the

duration of the contract; no workman may leave his work before the expiry of this

term. Article 3 bans employers to employ workman, including domestic servants.

who has been imported for another employer, unless the latter is willing to release

him. Article 4 stipulates that a workmen who breaches the tenure of the contract.

shall be repatriated to his parent country, and shall not be entitled for employment

for the next two years. Article 5 stipulates that a workman whose contract has come

to an end, and does not wish to renew the same, despite the employer's desire, shall

be repatriated to his home country, and shall not be eligible for employment for a

period of one year thereafter. It is apparent that all the conditions imposed on the

migrant worker are heavily loaded against him - they are unilateral and onerous. It

would be interesting to examine such contract in the light of the judgement of the

Indian Supreme Court, in the matter of Central Inland Waterways Company, vs.

Brojonath Ganguly, [ 1986] LabiC 1312 SC; however, it is not possible to do so here,

in view of inherent constraints and limitations. The Council of Minister Resolution

Number 444 of 7-7-70, deals with the labour inspection mechanism, in terms of the

Labour Code. Whilst the Resolution is, as usual, very comprehensive, in our field

study we have noted that all respondents interviewed, reported that they were not

aware of any visible role played by the Government as a regulator of the labour

market. In that event, what could be the real, effective role played by labour

inspectors.

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e) Circular issued by Director General of the Central Province Head Labour Office

We also refer to a Circular issued by the Director General of the Central Province

Head Labour Office, Circular number 2/16/230 dated 26-11-80. The said circular

reiterates the existent rule "... prohibiting foreigners from engaging in instant

photography in streets, public gardens and parks." Another circular issued by the

same authority, numbered 8882, and, dated 18-12-77, states: " ... authorities have

observed reprehensible phenomenon that is almost prevalent in certain of the

Kingdom's cities where non Muslim foreigners work or vtsit. The phenomenon in

question is that such individuals wear only shorts, leaving the rest of their bodies

bare and frequent and mix with people in the markets and in areas where women

gather. This practice is considered reprehensible and unaccepted by the Shariah and

is not in keeping with Islamic values. Therefore, appropriate action must be taken to

prevent such phenomenon and to advise foreigners of their obligation to respect the

traditions of this country and frequent markets dressed modestly." This is the extent

to which the lives of migrant workers in Saudi Arabia are regulated by the legal

framework.

4.6 GUIDE TO THE MATTER OF IMPORTATllON OF LABOUR

a) Application at tlze Importation Office

It is now necessary to set out the procedure that is to be followed, for importing

labour. Every person desirous of importing labour, shall be required to file an

application at the Importation Office. The form has distinctive colours ·- white for

Government departments, i.e., form B; Companies, firms, hospitals, etc., - pink, form

A; for import of domestic servants, blue, form C; for import of agricultural workers,

green, form D; application for bringing family into the Kingdom, yellow, form E;

etc. The application must be accompanied by the Index Card and the File Number

Card. Completed applications must be submitted to the Importation Office in serial

order allotted by the Reception. Application for importing manpower may be made

at the Importation Office, at Damman, Jeddah and Riyadh. Since only three offices

are provided for, it would be necessary for employers outside these cities, to delegate

I '' ))

the work regarding follow-up, etc. to their authorized representatives, who shall file

the undertaking.

b) Responsibility for Visa

After the issue of an approval for importation of labour, the applicant shall be

responsible for visas, etc., as necessary. Where a visa issued has not been used. a

certificate must be obtained from the embassy to this effect; in case such non­

utilization certificate is not obtained, then, it shall be deemed that the applicant has

availed of the visa. An employee who leaves the country permanently, must obtain a

requisite certificate from the Passport Office; this certificate is the conclusive proof

of the termmation of the employment contract. Further, on the issue of the visa. the

applicant, i.e., the employer would be deemed to be liable for the implementation of

the various provisions of the Labour Code, e.g., wages, rights of workmen, hours of

work, etc.

c) Issue of File Number

Rules also stipulate that every employer who intends to, or who imports labour shall

be allotted a distinctive file member; this file number would be the reference point

for all future activities. The application for importing labour must be made by the

applicant, or by a person duly authorized by him; definitely, this work cannot be

delegated to a non-Saudi; because, he would have been imported for some other

specific jobs. The visa issued would be for one year - and its validity cannot be

extended under any circumstances. No non-Saudi can be imported, except from his

own country, and through the Saudi embassy located in that country. In case, the

country of import does not have a Saudi embassy, then, the importation must be done

through the nearest Saudi embassy. The age of the person to be imported should not

be less than twenty years for men and thirty years for females; in case families of

non-Saudis are to be imported, then, the boy must be below eighteen years, and the

daughter must be unmarried.

What are the essential requisites of a valid application? A valid application shall

consist of the following:- a) The basic form neatly and coJTectly filled in and duly

signed by the applicant, if he is himself filing the application; if the application is

134

being filed by his representative, then, the authority letter must be filed also: there

should also be a declaration that no such request had been made previously; b) the

certificate which authorizes the applicant to carry on his business must also be filed:

c) the justification for importing labour is considered to be the most important part

of the application; d) there must be a certificate cettifying that the applicant has an

account w1th the Bank and that the account has been in existence for atleast six

months and that the balances reveal the capacity of the applicant to bear the wage

expenses of the workers - the overall ratio being 100000 SR for a group of twenty

workers; e) some of the employers are obliged to file the certificate of registration

with the Labour Office e.g., shops, factories, bakeries, restaurants. etc; f) where the

applicant had previously imported labour, a certificate about the usage of those

workers must also be presented; g) if the applicant firm is owned by a Saudi female.

then, a Saudi manager must be appointed by the firm. It is evident that the

application to import foreign workers is a very cumbersome document. and, covers, a

wide range of stipulations. Therefore, it may be concluded that importing workers,

does not appear prima facie, to be a very easy process.

This brings us to the close of our analysis of various statutory provisions governing

migrant workers in Saudi Arabia.

4.7 REVIEW OF THE STATUTE

(a) Serageldin et al9 say that the Ministry of Labour and Social Affairs was

established in 1961. In 1971, it was reorganized into two separate wings - Labour

and Social Affairs. "The Directorate for Labour Affairs is responsible for

regulations including labor inspection, safety provisions, settlement of disputes and

compliance with the requirements for social services for workers. It operates

vocational training centres and apprenticeship programmes .... The Labour Offices

perform several functions free of charge, including registration and placement of

jobs applicants, maintenance of records and jobs transfers, and

9 Ismail Serageldin et a!: Saudis in Transition, The Challenge of a Changing Labour Market, OUP,

1984, New York.

135

review of application from expatriates for work and residence permits.'' They further

say that the labour directorate performs the role of labour unions as in other

developed countries.

(b) The Labour Code of l969, was drafted with the assistance of ILO. In a later

chapter we shall examine, comparatively, how the Labour Code compares with

ILO's Conventions and Recommendations. What is apparent, thus far, in our

examination is that the Code may appear good on paper, but, the reality is some\vhat

different. We have already stated that migrant workers in the Government sector are

much better off than in the private sector; of course, the discrimination against

migrant workers as compared to locals, is also very pronounced. This point was

examined by Serageldin et al [ibid.], and their findings are as follows:-

"Respondent... were asked whether their employers provide for specific jobs

benefits: annual leave, sick leave, health insurance, disability benefits, Housing,

Transportation, Training, Children's education .... a comparison between Saudi and

non-Saudi workers indicates that benefits were largely larger for the Saudis." The

findings of their survey, as shown below in Table 4:1, is all the more significant

because, Serageldin etal, are very sympathetic to the Saudi Cause.

Tabel4: 1

Benefit Saudi Respondent Non-Saudi Respondent

Public Private Public Private Sector Sector St~ctor Sector

Annual Leave 80 90 llOO 77

Sick Leave 74 78 52 56

Health Insurance 79 67 58 48

Disability Benefit 65 41 36 26

Housing 10 23 76 47

Transportation 82 32 80 28

Training 16 6 0 1

Children's Education 1 3 4 0

[Figures indicate the percentage of respondents admitting to benefits].

136

The above table confirms our findings in the field survey and other conclusions that

the condition of migrant workers in the private sector is pitiable; e.g., only 56%

enjoyed sick leaw; only 26% enjoyed disability benefit. when, bulk of migrant

population is doing dangerous jobs; only 1% received training. This further confirms

that the various provisions of the Labour Code are but attractive ornaments in the

Statute Book of Saudi Arabia-- they are not meeting any real purpose on the ground.

''Employment benefits, security and labour conditions in general have improved

significantly by comparison with the 1960s .. _ Improverrents were still possible.

however, in health insurance, disability benefits, retirement plans and the provision

of training opportunities... In the absence of trade unions in Saudi Arabia, the

Government has traditionally assumed the role of worker's spokesman and protector.

"For all these reasons, the Government is continuously examining the system of

employment benefits and labour conditions with a view to improving them and

possibly enacting more comprehensive labor legislation at appropriate times. The

first step in this direction include the expansion and improvement of the staffing of

the Labour Inspection function to better monitor the extent of employment benefits

and their application as stipulated by laws."10

[It is seen from Migrant Workers, ILO, Geneva, 1999, that a fresh Labour Code was

issued on 6-9-1989; despite best efforts, a copy of the same could not be got from the

ILO or any other source]

The field survey of this researcher in February 2000, have confirmed the pattern of

Serageldin' s findings. Therefore, to improve the conditions of migrant workers in N'· . ...:'-t

Saudi Arabia, something more than fond hopes _shall be required.

10 ibid.

137

4.8 MIGRANT WORKERS IN KUWAIT

After an examination of the Saudi legal system in the context of Labour Laws and

migrant workers, it would be interesting to briefly exami1e the Kuwaiti system in

this regard.

a) Ministerial Resolution No.1 06 of 1994 Regarding The Regulation Of Employment

In The Private Sector.

Section 1 of the Resolution says that it is applicable to employers who employ

Kuwait and non-Kuwait workers, etc. So this is applicable to all migrant workers in

Kuwait who work in the private sector. We have already noted that most Kuwaiti

nationals work in the Government sector, and therefore, bulk of the workforce in the

private sector consists of migrant workers.

Section 2 of the Resolution deals with the registration o:~ employers; it says that

licences to conduct business issued to employers shall be registered at the Labour

Office within whose jurisdiction the establishment is located. The application shall

be accompanied by: -

a) a copy of the partnership deed with amendments, if any;

b) copy of licence to conduct business;

c) a certificate from the Public Civil Infonnation Authority;

d) a specimen of the employer's signature.

Section 3 stipulates that the authorized signatory must be either a Kuwaiti national,

or a national of the GCC State.

Section 8 says that the Labour Office shall issue a permit to an employer to employ

non-Kuwaitis in accordance with the following principles and conditions:-

a) that there should not be a Kuwaiti or persons to whom the same provisions

apply amongst those registered at the Ministry who is capable of performing

the work required;

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b) that the need for the worker applied for must be justified in terms of

economic activity or projects which are at hand, and the number of persons

already employed:

c) that the trade of the worker be relevant to the economic activity of the

employer and its subsidiary and divisions;

d) any other condition that may be imposed by the Deputy Minister.

In terms of Section 10, the employer who has been given permission to import labour

shall be obliged to apply to the relevant Labour Office within a period not exceeding

one month from the date the labour enters the country to obtain the required work

permit; amongst the various documents which shou:l.d accompany such an

application, a copy of the concluded contract must be necessarily be annexed: if this

is not complied with, then, the Ministry may prevent the employer from taking

further labour for a maximum period of one month. This means that in every case of

migrant workers in Kuwait. the Labour Office is in possession of the contract of

employment: it is therefore possible to ascertain cases where the terms of the

contract are not fulfilled by either of the parties.

Section 11 states that an employer shall be prohibited from employing non-Kuwaiti

workers unless they have obtained work permits from the relevant Labour Office to

work for it. No employer may import labour and refuse to give work or allow them

to work for third parties. It is not clear as to what would be the status of contractors,

who may import labour for executing projects for third parties- in law, such workers

would be deemed to be employees of the principal employer.

In terms of Section 13, migrant workers would be given permission to work in

Kuwait for three years, renewable, on the condition that an application to this effect

is made atleast three months before the expiry of the work permit. By this method,

the Kuwait Government would be able to exercise effective control over the number

of migrant workers; by keeping the period of permit short, upto three years at a time,

the Government can intervene at regular intervals, to shut of the supply of migrant

workers. It is notable that the Saudi Labour Code does not carry any such stringent

prOVlSlOn.

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Section 20 states that the Ministry shall be entitled, in public interest to refuse an

application for work permit or its renewal or transfer: Section 21 empmvers the

Ministry to "close the file" of an employer, either temporarily or permanently. if the

employer is guilty of fraud, deception, forgery, etc. Section 22 stipulates that the

employers executing contracts for the Government, shall arrange transport of the

migrant workers, either by Kuwait Airways or by the national carrier of the country

of the migrant worker.

This brief analysis of the provisions of this Resolution leads us to the conclusion

that, the corresponding provision of the Saudi Law - the Guide to the Importation of

Labour, is a much more comprehensive document than this: though of much later

vintage, this Resolution prima facie appears to be highly inadequate to meet the

various ills of the migrant labour market - e.g., there is nothing which protects the

workers, especially, the domestic workers, whose situation has been explained in a

previous Chapter. It must be stated that the Saudi provisions are extremely detailed

and comprehensive; it is another matter that despite this, the end result -- the reality -

is the same.

4.9 TEMPORARY PROFESSIONAL WORKI~RS IN THE USA

Since Asian migration to the United States of America is a topic of current relevance,

it would be expedient to explain briefly, the various issues involved in migration of

professional workers to the USA. The H-IB visa enables non-nationals, other than

Mexicans and Canadians, to work upto six years in the USA. 11 Six years may be

spent in the USA, though the period is divided into two blocks of three years each.

Like in Saudi Arabia and Kuwait, an individual migrant worker cannot apply for the

H-IB visa-- the employer has to do so -i.e., similar to the system of work permits in

the Middle East States. Another necessary requirement for getting a H-IB visa is that

the prospective worker must have studied for atleast four years at the college level.

This means that H-IB visa can be given only where college degree is a necessary

11 Allan \Varwick, U.S. Immigration & Citizenship, Vision Books, N. Delhi. 1999.

140

requirement ~ e.g .. for a mill worker, manual worker, etc .. H-IB visa cannot be

granted. Another significant feature of this category of visa is that, unlike in Saudi

Arabia and Kuwait, the employer does not have to undertake that no local nationals

are available for the jobs -- there could be any number available -- but, that does not

affect the visa application.

Like in Saudi Arabia and Kuwait, the employer has to go through an intricate

reporting system, before, the H-IB visa may be issued. "Prospective H-IB employers

must get a Labor Condition Application (LCA) certified by the U.S. Department of

Labor (DOL) before the employer can file an H-IB petition with the INS. In the

LCA, the employer must attest that the job is offered at the higher of the prevailing

or the actual wage for the position, the employer is offering the job at the prevailing

working conditions for all other workers in the same job category at the facility, and

that the employer has posted a notice of filing the H-IB attestation in two

conspicuous locations at the place of employment or has notified the employee· s

bargaining representative. The employer must also keep records proving that the

statements in the LCA are true." [ibid: 182].

Therefore, it is apparent that Saudi Arabia, Kuwait and t:1e USA practice similar

entry control restrictions; another feature in similarly amongst these three countries

is that, the onus of getting the authorization for work, rests entirely upon the

employer. To that extent atleast, though the situation between the Middle East and

the USA is vastly different, yet, significant similarities in rules and procedure are to

be found.

4.10 CONCLUSIONS

It may appear, at first sight that the law in Saudi Arabia is very unfriendly, strict.

and one-sided; that is definitely a part of the reality, which we have examined, in

terms of statute, and also empirically. Unfortunately, the Saudi legal system, in

labour matters, is contrary to the stated objectives and foundations of the religions

system; no reasonable explanation for this dichotomy is possible, save and except,

the profit motive.

\4\

However, as the experience of Kuwait and the statutory position of the USA reveaL

the Saudi system is not unique. The moral of this research would be that, wherever

the migrant may be, the host country is bound to be a ditl!cult. unfriendly and

restrictive place.