Sunday, March 29, 2009

Expat rights upon transfer of sponsorship

These are tough times. The entire world is reeling under a severe economic depression and Saudi Arabia is no exception. Businesses folding up, bankruptcy and mergers during any recession are quite common, but the human cost involved is enormous. Expatriates working in Saudi Arabia simply cannot be insulated from what is happening around them, particularly in these tough times. Fortunately, certain rights have been inculcated in the Labor Law precisely to protect the workers against such calamities.

Articles 17, 18 and 19 of the Labor Law go at length to describe the situation and also to protect the rights of the workers. It is not uncommon to see workers of a company left to fend for themselves, when their sponsor simply winds up his business or sells it to some other sponsor. When the ownership of a firm is transferred to a new owner, or there is a change in the legal status of a firm through merger or partition, the Labor Law is clear on one thing - the work contracts of the workers would remain in force and service would be deemed as continuous. To put it simple, you cannot sack an expatriate worker simply because the new sponsor doesn't want you. All the rights of the worker including his pay as well as End of Service benefits remain the responsibility of both the predecessor and successor owners, in case of mergers.

In case of ownership transfer, if there is any change in the condition, the written approval of the employee must be taken. In case the employee is unwilling for any of the conditions, then the previous sponsor is legally bound to give the employee all his dues. He should also not object to the employee seeking employment with any other sponsor in the kingdom.

The Labor Law also throws some interesting insights if a firm becomes bankrupt. Amounts due to the workers are deemed as "first rate privileged debts". To unwind the legal jargon, what this means in simple language is that when a firm becomes bankrupt, the first right of the amounts from the sale of the firm is to the employee. Article 19 of the Labor Law is very explicit on this. The worker is supposed to be paid one month's salary as "expedited amount" to keep him going. This amount takes precedence over all other expenses including judiciary, legal, banking or liquidation expenses. In short, the law simply says to pay up the employee first before settling the bills of the debtors, lawyer fees, banks, etc.

Ignorance isn't bliss, it is dangerous. It is always helpful if you know what you are rightfully due. Hope this post was interesting.


Anonymous said...

Could you please update if I want to resign from present organization, after submittal of my resignation minimum how many days I have to stay? When I can leave? As per the labor rule

Expatguru said...


It depends on what you have signed in your contract. Usually it is 30 days notice.

Krish said...

Dear expat guru,

I really surprised to see your web blog it is amazing and of great help to asean's Please keep up

I am cad technician(draughtsman-2 years course), working in uae for british firm , in the civil engineer's visa (done through correspondence course from US university attested by us government).

Now i am more likely to get a job in saudi arabia, My doubt is that
whether the my engineering degree
attested will be eligible to get engineer's visa or will i need to go through attestation again like
uae governments 'degree verification program'

is draughtsman or cad technician eligible to sponsor family

Thanks a lot krishna

Expatguru said...


If you have not done a course recognized by the UGC, it will not be attested by the Ministry of External Affairs and hence the Saudi Embassy.

ahtas said...

Dear expatguru, you have been a great help to a lot of people here, i hope you have an idea about my question. My dad works at a company in saudi arabia, and he is the sponsor on my iqama, so my profession on my iqama is "student". I have recently found a job in saudi arabia with a good company and the company wants to do a sponsorhip transfer so that they become my sponsor. I have a business administration diploma from the lebanese american university in beirut, and an attested copy of it from the saudi embassy. My dad has also agreed to submit the release papers. Do you have an idea about what is next to do, and how much it would take to transfer my sponsorship?
I appreciate it very much. Thank you.

Expatguru said...


First try to find out the visa profession which your sponsor is going to provide. You may have difficulty because administration positions are reserved for Saudi nationals. If your sponsor is giving you a visa other than any administrative profession, you will have to provide backup certificates to prove that you indeed are qualified for that. The transfer process is simple provided the visa profession is of supervisory category, for instance not driver, mason, carpenter, etc.

Anonymous said...

Hi Expat Guru

thanks for your help to expats. Could you please provide the law which states the right of release of sponsorship to worker in case of locally hiring.

Expatguru said...


Unfortunately, you cannot force a sponsor to release you, even if you are hired locally.

Anonymous said...

Hi Expat Guru,

First of all sorry for posting this somewhat irrelevant question here under this post actually could not find any appropriate place..

Here is the scenario with my friend he just arrived on contractor visa from pakistan (25th of april) on programmer visa but right after his arrival he has got some family committment back at home so he want to leave as early as possible. but when he contacted with his employer they are saying that he would have to bear the penalty of all visa procesing, visa feed and other processing fees of total of around 8000 SR.. i just want to ask you are they legal in their this act as there was no such contract that they will charge amount in case of any such situation.. Please help .

Khurram Shahzad

Expatguru said...


There is a legal angle and also a practical angle to this. The legal aspect is very clear on this. As per Article 40(1) of the Labor Law, an employee has to only bear the cost of his return ticket if he resigns. So your friend is free to approach the labor court on this.

The practical angle is the time taken for the justice to be delivered and the amount of wasta the sponsor has with the people concerned. The case may drag on for years together before your friend gets justice.

A better way would be to negotiate with the sponsor the amount to be reimbursed and get out of the country.

Akram said...

Dear ExpatGuru.
Really appreciated your work.GOD bless you

My first company ( who hired me from pakistan) gave me release after finishing 1 year contract. then i joined 2nd company and my iqama was transfered to it, but now i want to take release from this 2nd company as i did not recieve my salaries, but my CEO is not willing to release me and refused to give the release letter and passport.
Now in this situation what can i do to get rid of this company.


Expatguru said...


Without any delay, approach the labour court with all supporting documents. This is the only legal way out for you.

Anonymous said...

Dear ExpatGuru,

I have been working with this company for 1 year and 9 months now, but suddenly I had a big fight with my employer, now I want to know if i can resign from his company? We don't have a proper contract either.

I hope you can help me to know my rights.

Thank you so much and i hope you can help more expats in this country who's having trouble with their Sponsors.

May Allah and his blessings be with you always.

Thank You,


Expatguru said...


Please fill in your query in the form using the link in the top right corner of this blog. Please include all the details including the problem you are currently facing. I charge a nominal fee for my consultancy, which would get you a detailed, personalized and confidential reply by email.

Anonymous said...

If my current sponser is not releasing me even i submit my resegnation with one month notice then what i can do ?
syed zeeshan

Radz Bandiez Rado said...

Hi expert guru,
Please let me know if the company becomes bankrupt, can i fight for my release? Appreciate ur early response, thank u

Expatguru said...


You will then automatically be eligible for a release to another company.