UK: KSA: New Regulation On Termination Of KSA Nationals' Employment By Reason Of Redundancy

Last Updated: 23 February 2017
Article by Sara Khoja and Ahmed Alhudaithi
Most Read Contributor in UK, November 2017

On 30 January 2017, the Ministry of Labour and Social Affairs announced a new resolution limiting the ability of employers in the Kingdom to termination KSA national employees employment by reason of redundancy. The new resolution is far reaching and whilst it has not been published in the Kingdom's legal gazette, it has been published in a number of national Arab newspapers and states that it is effective from the date of publication.

The resolution is aimed at regulating and in so far as possible limiting the collective termination of KSA nationals by reason of redundancy. In any cases other than an employer's bankruptcy and the closure of the employing establishment entirely, the resolution prohibits large and medium sized entities from making collective redundancies of KSA nationals for any reason without first informing the local labor office at least 60 days prior to serving written notice of termination.

Under the resolution, collective dismissal means, terminating groups of KSA nationals for reasons related to the employer and not to the employees (in other words for restructuring or redundancy purposes). A group will exist if the proposed terminations are of more than 1% of the KSA national employees or a total of ten employees whichever is greater within one year from the date of the last termination of a KSA national.

When notifying the local labour office of the intended dismissals, an employer must include the following documents and information with its notice:

  • a financial study from the employer explaining the reasons for the proposed collective dismissals;
  • Name and numbers of KSA nationals who will be terminated with the job description and reasons for termination for each one;
  • Name and numbers of none KSA nationals with their job description who are at the same level of the KSA nationals who will be terminated; and
  • The procedure or steps taken by the employer to avoid the terminations.

Within 45 days of the notice, the labor office will evaluate the risks and issue an opinion to the employer about its proposal. The opinion will be based on the following:

  • The financial position of the employer;
  • The possibility of finding alternative solutions by replacing none KSA nationals with KSA nationals.
  • The possibility of finding alternative positions for the KSA nationals within the entity, or in another entity owned by the employer.
  • The possibility of a settlement with the KSA national employees who will be terminated.

A commission for reviewing employer notices and providing opinions on such notices, will be formed in each labor office around the Kingdom and its members will be as follows:

  • The manager of the labor office
  • Representative of the HRDF branch
  • A legal counsel

The commission has the power to do the following:

  • Call the employer's representative to discuss the reasons for proposing collective dismissals as well as how the employer can justify terminating KSA national employees;
  • Propose an alternative, in consultation with the employing entity to avoid the termination;
  • Review the employer's notice and assign a legal expertto give his opinion; according to the Labor Law and its implementing regulations, and in accordance with this resolution and other rules and regulations;
  • Reject the notice and the reasons for terminating KSA national employees;.
  • Accept the notice and the entity's reason for terminating KSA national employees.
  • Develop a plan to address the effects of the termination of KSA national employees if the commission is convinced by the reasons presented by the employer for the collective dismissals.

The Ministry of Labour may also impose penalties for companies that violate this resolution, including blocking the employer's ability to apply for new work permits or transfer sponsorships to it for a period of between 30 -360 days depending on the seriousness of the violation. If an employer breaches the resolution and effects collective dismissals of 15 to 20% of his Saudi national workforce without prior approval, it will be barred from applying for new work permits, accepting visa transfers or being able to object to its employees transferring sponsorship without its approval for 540 days. Where an employer collectively dismissed over 20% of its Saudi national workforce without following the new resolutions requirements, these penalties will also apply, in addition to a bar on the employer being able to renew existing work permits, for 720 days – in effect for almost 2 years.

The new resolution marks an innovative development in KSA Labour Law and produces a more rigorous procedure regarding collective dismissals than exists anywhere in the GCC. It contrasts somewhat with some of the amendments to the KSA labour law introduced in October 2015 which included the removal of the right to reinstatement for KSA national employees and the introduction of a statutory formula for compensation for unjustified termination (now contained in the current article 77 of the Labour Law). Amendment of Article 77 of the KSA Labour Law is much anticipated in the near future and the new resolution would indicate a willingness to provide further protection for employees.

KSA: New Regulation On Termination Of KSA Nationals' Employment By Reason Of Redundancy

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Sara Khoja
 
In association with
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement

    Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of www.mondaq.com

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

    Disclaimer

    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

    Registration

    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

    Cookies

    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

    Links

    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

    Mail-A-Friend

    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

    Emails

    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .

    Security

    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at enquiries@mondaq.com.

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions