Coronavirus in Saudi Arabia

Clarification on Reducing Salary of Citizens and Saudi Expats for Next 6 Months by MOL

The current crises of Coronavirus have made economies of the world to shatter. The people are locked in their houses. The factories and businesses have shut causing people major crises of living. Under these circumstances the Ministry of Human Resources and Social Development passed an Article 41 of Labor Law to facilitate the firms and the Saudi expat workers. However, people have certain assumptions and questions regarding the new law. To discuss the statement of the ministry and the questions answered by them read the article below.

Reduction of Working Hours made Compulsory

The Ministry of Human Resources and Social Development made a statement confirming that the private sector companies cannot reduce the Saudi expat worker’s wages without reducing his working hours. They said,

The reduction of the wages must be commensurate with the reduction in working hours. However, the permissible reduction of wages must range between one percent and 40 percent and that is under some strict conditions.

Why has the Ministry made a Special Statement?

The ministry clarified this point in a recent statement as a part of answering queries with regard to the provisions of Article 41 of the Labor Law and its explanatory note.

What are Other Conditions for Reducing Wages?

The Ministry told that it has set two conditions for the wage cut. They are,

  • The firm has been affected due to Coronavirus crisis.
  • The wage reduction should be in line with a reduction in working hours.

Are there any Limits for Reduction of Salary or Working Hours?

According to Ministry statement, there is no minimum limit for reducing working hours. However, a maximum limit for reducing wages is set. It is 40 percent.

What is the Proper Rule of Deducting Salary?

The reduction of salary will take place in the reduction of the actual working hours. It must be from the limit set for the actual working hours in Article 98 of the Labor Law, whether it is in the month of Ramadan or other months as the case may be.

Can a Firm Suspend Saudi Expat Worker’s Contract on Basis of Force Majeure?

No, the firm shall not dismiss citizen and Saudi expat worker on the principle of force majeure, considering the fact that it does not benefit from the government subsidy, unless the conditions referred to in the provisions of Article 41 and its explanatory note are fulfilled.

What does the Clause Force Majeure Means?

In legal definitions, Force majeure clauses are contractual clauses which alter parties’ obligations and/or liabilities under a contract when an extraordinary event or circumstance beyond their control prevents one or all of them from fulfilling those obligations.

Can Saudi Expat Worker’s Contract be Suspended on Reduced Hours?

The Ministry said that the firm has the right to terminate the contract of the employee whose work hours have been reduced or who has been given exceptional leave if it fulfills the 3 basic conditions.

What are the 3 Conditions to be met for Suspending Employers?

The three (3) conditions required for suspending workers are,

Conditions Description
Condition-1 A period of the six (6) months shall be completed following the procedures taken as part of the precautionary or preventive measures that required reduction of the working hours or suspension of work for a specific period of time.
Condition-2 The expiry of the situation that warranted application of the procedures related to the reduction of wages, and full or part of the annual leave and exceptional leave.
Condition-3 It must be proven that the employer did not benefit from any subsidy from the state, regardless of the type of benefit that was availed to confront this situation.

Is it Compulsory for Saudi Expat Workers to Abide by Article 41 of Labor Law?

The Ministry said that the Saudi expat worker has no right to refuse these procedures of Article 41 of Labor law except for exceptional leave, where the worker must agree to it. The ministry stated that the firm can apply three options in the case of a worker. They are

  • It can grant the worker leave with pay for a certain period.
  • Reducing the wage by no more than 40 percent.
  • Grant unpaid leave in the event of his approval.

The Ministry stressed that stringent actions shall be taken against firms that violate the provisions of Article 41 of the executive regulations of the Labor Law. The ministry is trying to compensate the crises of Coronavirus. We hope that everything goes well and gets back to normal. Till then, stay safe and stay tuned with us.

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