Saturday, September 5, 2009

The law and reality of your contract

Expatriates working in Saudi Arabia are in an unenviable situation. All of us have fixed term contracts which we sign before taking up an assignment in the kingdom. We just assume that once the contract is extended, we have another term of stay in the kingdom.
I have mentioned in the past the importance of going through your contract terms and conditions very carefully before signing it. What protects you once you land here is only the contract and nothing else. Note that all the important things which matter to the expatriate, your job title, family visa, end of service benefits, virtually all of your benefits and obligations of your sponsor, are all based on your contract.


My attention was drawn to an interesting article in today's Arab News. This is a question by one of the readers to a lawyer about the status of his contract. The question relates to a "time bomb clause" in the contract by which the employer can terminate the contract at any point of time by giving a month's notice despite a contract to the contrary. The reply given by the lawyer is 100% correct and I have no reason to dispute it, given that the learned lawyer is a well-respected one in his profession. What I would like to focus in today's post is what is NOT mentioned in the reply.



For those of us expatriates who have continued to stay beyond the "initial" contract which was signed after entering the kingdom for the first time, you must be careful on what you sign while extending your contract. Clever employers use the word "extension of contract" rather than just "contract". Expatriates working in Saudi Arabia must be aware of their rights and obligations while extending their contract with the above words. What this means in simple language is explained below.



When you first arrive in the kingdom on a contract, this becomes the "mother" contract. Now let's say you signed a 2-year contract. At the end of the 2nd year, both you and your employer want to renew this for another 2 years, either on the same terms or on mutually agreed upon terms and conditions. In case the new contract says that it is an "extension of contract", your employer has every right to terminate you with just a simple one-month notice. All is not lost. You too have an equal right to terminate the contract with the same notice period. It doesn't matter if you have a 2-year contract extension. What this, in effect, means is that the employer is not obliged to give you your complete end of service benefits and other dues until the "end" of your contract, i.e., until the 2-year period in the renewed contract is completed. This is the difference between a "contract" and an "extension of contract".



For example, this is my 12th year of stay in the kingdom. After the "mother" contract of the first 2 years, the contract with my employer has always been an "extension of contract". My employer chose not to sign a fresh contract, but rather just "extend" the existing contract. Of course, it was by mutual consent. So, every two years I sign a contract extension for another 2 years. I am under no kind of illusion that I would stay in the kingdom for atleast 2 more years. Every day I come to work, I know that I have a notice period of 30 more days on either side, even though I have a 2-year contract. I am quite happy with this arrangement because I am not bound to work for the complete 2-year period in the extended contract and I can just quit if I get a better job by giving a month's notice, just as how my employer can also fire me by giving a month's notice. So, all is fair in love and war, as they say.


After all, the only thing certain in Saudi Arabia is uncertainty! Hope this post is an eye-opener for fellow expats.



61 comments:

Anonymous said...

Let's see if I got this right.
If I came here on a 2-year 'mother' contract and then extended twice; after completing 5 years of service I could quit my job with a month's notice and receive only four year end-of-service benefit.

Expatguru said...

Anonymous,

It again depends on what is mentioned in your extended contract. The law says that you have to be paid ESB up to the last day you have worked. But in case of a contract extension with no other modification made to the original contract, the employer is not obliged to pay you the balance ESB from the date you are terminated up to the end of the extended contract, in your case the 6th year. If you had been terminated in the mother contract itself (note, I use the word 'terminated' not 'resigned'), the employer would have paid you up to the end of the mother contract.

ofwempowerment said...

Sir,

Im a fan of your blog "working in saudi arabia". im also a blogger http://ofwempowerment.wordpress.com/ . i just want to ask permission if i can post excerpt of your entry "The law and reality of your contract". It has valuable information for my readers (overseas filipino workers). Further, can i also add your blog in my favorite links.

Thank you so much and awaiting for your favorable reply.

Respectfully,

Manuel Amora

Expatguru said...

Hello Manuel,

I appreciate your courtesy in asking my permission. Please go ahead and take excerpts from this blog. Please mention the source as this blog. Good day!

Expatguru said...

Hello Manuel,

I appreciate your courtesy in asking my permission. Please go ahead and take excerpts from this blog. Please mention the source as this blog. Good day!

Dany said...

Sir,
I am currently working in HRD for a company in UAE.Our frim is expanding the business to Saudi. So we are in the process of framing an employment contract.I am totally unaware of the labour laws of Saudi, Can u please help me in that.

thanks in adance.

Expatguru said...

Dany,

Please be specific in your query as to which particular area of the Saudi labour Law you need consultation about. I charge a nominal fee for this. Please use the query form using the link given on the top right hand corner of this blog.

revy said...

I found this blog is very useful.
Thank you very much for all your efforts.
You have made this for all the totally strangers. Wish you always in excellent health.
I have a brother working in SA and now in his 3rd year. He started as a salesman in a big retailer company and fortunate enough of being a procurement staff now. But on his iqama stated a labour job. What are his disadvantages in this circumstances? Can he bring his wife and children to SA? If not, what can he do? Thanks in advance.

Expatguru said...

Revy,

It is impossible for a personal on a labour visa to bring his family. For a more detailed reply, please post your query in the form through the link given in the top right corner of this blog. I charge a nominal fee for this. This is to segregate spam from genuine requests and also to give a customized reply to your query.

Anonymous said...

Dear expatguru,
My company(principal european company )terminated my contract on the first day of Ramadan because some ppl made some false accusations against me. They made the local sponsor issue a letter asking me to get another sponsor within 30 days. Since it was the period of Ramadan they extended it another month. I was able to get another sponsor within this period and they the whole process of exchange of demand and release letters has been done. This was 3 weeks ago. My papers are now submitted to the Labor office. Yesterday i got a call from a person in the principal office that I need to get my transfer done before the hajj holidays start. Is it legal for them to ask me that? They gave me the release letter only 3 weeks ago and my papers are already in the labor office which means its out of my hands - can they put a time frame on it even if the delay is from the govt. side? Also shudnt this request come from the local sponsor who released me to the local sponsor who demanded me? Are there any legal options for me? HELP (PS> Im a big fan of your blog - never thought id be needing help like this though :)

Expatguru said...

Anonymous,

What happens is for good and the fact that you got another employment is a good omen. Remember never EVER get cowed down by empty verbal threats. Any such request must come from your local sponsor. Your current company has absolutely no say in matters of transfer of visa. Your local sponsor also must inform you in writing, not verbally. Take him into confidence and explain to him that you have already submitted the papers. Do not let yourself be bullied. If the guy calls you again, tell him that you will approach the labor court. All these are tacticts to unnerve you. Dont lose your cool. Good luck!

Anonymous said...

Thank you expatguru for the encouragement - but in reality i cant approach the labor courts rite>

Expatguru said...

Anonymous,

Looks like your spirit has been pulverized by people around you. Labor courts DO act upon errant sponsors. The very threat that you would approach the labor court is enough to unnerve people, because as long as a case is in progress, all Government-related paperwork of the sponsor would come to a halt. Please, have some faith in the system.

Shary said...

Dear EXPATguru,

I admire your efforts regarding such thought povoking and informative articles, may GOD bless you and help to serve mankind for the rest of your life.

I want to ask you that,i am having an oppourtunity to get an AZAD visa, but my Kafeel is offering the visa for a MOBILE Tech instead, where as i want to work as an engineer. I just want to know that whether i ll be able to to job as a Telecom Engineer even after reaching Saudia over such VISA.

Expatguru said...

Shary,

First of all, there is no such thing as an "AZAD" visa. You need a sponsor to enter the kingdom and work here.

Apart from this, NEVER come on a technician visa if you are an engineer.

abdu said...

Hello,
I intially came to Saudi in 2007 as a Computer Engineer Iqama for a local firm. . I am American, I left the firm in Jan 2009 and began work for a local saudi bank Feb 2009 , i xfered my sponosorship Nov 2009. i was just given a very lucrative offer to start with a new firm in 4 months time (given my notice period as per my contract at the bank is 3 months). Does my current sponsor have any right to stop my request to move to this new firm as my contract is a 2 year contract ending Feb 2011.
The initial sponsor is the one who provided me the Computer Engineer visa, the current sponsor was just a xfer from old firm to bank.
Same title in visa.

Expatguru said...

Abdu,

Please fill in your query in the form through the link given in the top right corner of this blog. This would help me segregate spam from genuine requests while at the same time would give you a detailed personalized reply. I charge a nominal fee for this.

Anonymous said...

hi,
gud day! im currently working in riyadh as a nurse and my contract will end at july 16,2011 and last nyt i received a memo for a temporary transfer for 2months starting june 22,2011 to other hospital but same owner only. i dont want to go coz ahead of tym i give my non renewal letter to the management. but there forcing me to go there or they will terminate my contract if i will not obey them. My question is can i refuse on this memo and really they can terminate me evendo 3 weeks frm that my contract will end?? plss nid an advice

Expatguru said...

Anonymous,

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

Anonymous said...

Let see if you have signed a two year contract to your country but no employer sign and when you came here in saudi arabia you didn't sign any contract from your employer. what will be the possible result of the contract you signed to your country. is it still valid?

Mohammad Riyaz said...

Dear Sir,

I am working in Saudi Arabia last 6month on Mother Contract 2year (I signed only an offer letter which I got in India, After arrived I did not sign any employments contract documents ), As Engineer.

But due to some problem I would like to give resignation and go back to India, please let me know the law of resignation because as discuss of my employer he is not agreed to leave me .

Please help me
mohammadriyaz92@gmail.com

Expatguru said...

Riyaz,

Please fill in your query in the form using the link in the top right corner of this blog. I charge a nominal fee for my consultancy, which would get you a detailed, personalized reply by email.

Abdul Majeed said...

Sir,
First of all i would like to thankyou the efforts your are showing to show all the expatriates a right path in the kingdom where every individual is ready to take advantage of other inspite of being muslim...

I would like to ask you a question,, my employer keep on terminating the employees with immediate effect,If the same comes to me with out one month of pay and ESB till take what necessary actions should i consider.


Abdul Majeed

Expatguru said...

Abdul Majeed,

Immediately file a complaint with the labor court.

Anonymous said...

hello sir ,
m working in al hassa in sop{moh} contract since 1 an half mont m at hostel without salary coz of my sudden termination d due to problem in saudi council i have loan my iqama is going to expire my final benefits has not yet settle sponscer in not taking any action m going everyday he is jus delaying plz sir try to understand my problem and suggest me some thg m in too much trouble i jus wan to knw how can i get final exit visa pls help me sir god will help u

Expatguru said...

Anonymous,

Do not wait even a single day more. Immediately lodge a complaint with your embassy and also with the labor court. Do not worry about anything. This is the only way to force your sponsor to pay you. Have faith in Almighty. All the best for your future.

boulboul said...

Dear ExpatGuru,

I am actually working for a big german company in KSA and it seems my manager wants to get rid of me. My employment is name "employment agreement" not extension and was signed 2 years ago when I was transfered from our main office in UAE to riyadh. The contract doesn't mention any duration but instead is stating that the contract is executed for an indefinite period. Now my manager approach me without any official commitment that he wants to fire me. He is just trying to make me settle while I did not have any official document from the HR. Is it possible for me to negociate any package (6 to 18 months salary) ?

Expatguru said...

Boulboul,

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

Anonymous said...

Dear sirs,
I have recently been offered in writing a managers position within a large construction company.
Unfortunately i have to negotiate for a better offer.

Can you assist in any and is there any perks i should claim for.
Thanks
Derek

Expatguru said...

Anonymous,

Please fill in your query in the form using the link in the top right corner of this blog. I charge a nominal fee for my consultancy, which would get you a detailed, personalized reply by email.

elpidio said...

sir,many questions arises from the content of the contract particularly in terms of allowances or plus allowances provided in the contract aside from the basic monthly salary, is there a regulation making it mandatory for an employer to pay such plus allowance although the same was not expressly indicated in the contract,please provide me the citation if there is any,thank you very much.

Expatguru said...

Elipidio,

Good question. If it is not mentioned in your contract, it is not mandatory for the employer to provide the same. The only overriding rule is the Saudi Labor Law which is final and binding.

Anonymous said...

Respected Sir,

I have completed one year of my employment, i have an offer from another company, other company is asking for a salary certificate or contract copy of my current job to finalise my offer, i don't want to give salary certificate to let people know, can i give copy of my current contract to other company, is there any legal issue if i refuse to join them, can they do any legal issue???

Expatguru said...

Anonymous,

As a thumb rule, you should NEVER EVER give these details to any employer. You must fix your salary independent of how much you are currently earning and not as a percentage of your current salary. If your future employer pressurizes you to do give your salary certificate, tell him that you would do only after he issues an offer. Otherwise, it is the same as revealing the password of your email id.

nonie santos said...

I have been working in King Fahad Air Base in Taif for 6 years now. There are countless labor violations here but we manage to tolerate most of them for the sake of our families needs, but this month of march 29, 2013, our company officially announced the end of their contract here in the Air base but eventhough they claim massive lose of income from the Air Base, they still renewed their contract here. So our main problem right now is that we are being forced to accept a contract that is not beneficial for us and they do not want to allow us to leave the company and return to our respective countries under the reasoning that when we completed our 3 years mother contract, they automatically renew our contracts without asking our permission and without presenting us with that said contract for us to view and sign. So i ask you Sir..is that legal?

Expatguru said...

Not only is it blatantly illegal, it is also nothing short of modern day slavery. If you are not too particular about your end of service benefits (which I really doubt if this company would give, citing losses), simply make use of the grace period, approach your embassy for an emergency certificate and pay for your return tickets back home. This way, you can not only go back with honor, but are also legally allowed to return for employment on another visa. All the best.

zsa zsa said...

i am a nurse in saudi for two years in a ptivate dental clinic. i had finished my contract last september 2013 and my iqama will expire on november 30, 2013. we expect that at the end of this month they will issue us exit visa but our employer said that we cannot go home and we need to renew our iqama because of the pendjng result of the case that we filed against a dr who is also under my employer. supposed to be the result will be abnounced by the end of ramadan but until now no result is given. we dont want to work here anymore but our employer is using that issue for us to stay another 1 year. what will i do pls help me.

Expatguru said...

zsa zsa,

Involve your embassy in this. You can always give an authorization letter to your embassy and go on exit.

Don Almario said...

Good day sir,

Hi Im Don Almario an OFW here in Al-Khobar KSA, I have a situation that I want your advice, My contract will end this coming December 14 2013, and I notified them 6 months before and earlier of 2 months. Right now I need to exit with in this December because of some urgent situation in my family I can not take anymore months. I told them that I would like to exit maximum of December 29, 2013, but unfortunately my Company doesn't approve my request they're holding me for another 1 month, their reason less of manpower but I notified them before. I don't know what to do, I'm a first timer OFW please advice me I really need to exit,

Thanks and Best regards

Don Almario

Expatguru said...

Dom,

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

Rizvi said...

What is the formula for calculating end of service benefit?? A person has worked for 2.58 years and resigned the job.

Expatguru said...

Rizvi,

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

Anonymous said...

Hi. I came to Saudi arabia in Jan 2014. I am a personal driver. My iqama has been made for one and half year. But I want to go back to India. Is there any way to go back to India without penalty. Plz help me

Anonymous said...

Hi. I came to Saudi arabia in Jan 2014. I am a personal driver. My iqama has been made for one and half year. But I want to go back to India. Is there any way to go back to India without penalty. Plz help me

jini das said...

My name is jini am working in dammam. ...I completed my contract on 19 dec 2013 I didn't get any renewal letter also. ...I went vaccation in January .....I came back march.....but now they r forcefully trying to transfer me to other branch.am not interested to continue there ....I wnt to come back soon. Wht I can do

jini das said...

Am working in dammam as a lab tech.i completed my contract in dec 19 2013. ...I didn't get renewal paper also ...I went vaccation in January and came back march ltook 51 days leave.i sent fax about my extension to our hospital.but now they r forcefully transefering me to other branch...am not intrest to continue there I wnt to go back.wht can I do for this

Renz said...

I am an electrician here in saudi arabia.I came here December 2013.I signed a 2 year-contract in the Philippines under Paras Agency now Joseline International Manpower Corporation for Bezel Arabia Company Ltd with 1800 SAR monthly salary plus 300 SAR food allowance.They collected an amount of 16,000 php processing fee from me and indicated in the receipt only an amount of 5,000 php so that poea will not question them.They let us signed our contract couple of hours before departure.When I got here,they let me sign another contract w/c the name of our employer is Rak Company instead of Bezel Arabia Company Ltd.Our contract here in saudi indicates 1500 SAR monthly salary+200 SAR food allowance w/c is different from the contract we signed in the philippines.We were not given salary for 3 months.We only got our salary last march 18,2014 but only 1000 SAR.We stay in baracks without aircon nor electric fans.We were robbed of internet and gas tank while we were asleep and the company told us it's our responsibility.We were even imprisoned for 3 nights because we only have temporary iqama.Please help me through these.Thank you so much.

Expatguru said...

Renz,

Please contact your embassy for help.

Expatguru said...

Renz,

Please contact your embassy for help.

ATher Indigo said...

hey, i need some information about exit here in saudia arabia, i am working here for last 1 year and now i want to go for exit, after completing my iqama which has still 3 months, besides i signed here on two years contract but i don't want to live here anymore just because of my job, i resigned here, so they took my iqama and they gave me my iqama photocopy with exit( khurooj nihaya) but i think they will renew my iqama and then they will bound me here for 1 year more for completing my contract, and i don't want this, so can you tell me the legal procedure how i can fire my ass here and go to my country,

Expatguru said...

ATher Indigo,

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

Waseem Manzoor said...

dear sir its really good to see your post with lot of info.may ALLAH will bless with health and peace .i just want to know i before coming to kingdom i have been sign 2 year contract in pakistan .my arrival was in kingdom on 8\8\2012 .but now i dont want to stay here and i just want to go back on final exit but its seems like my employer will not send me on time because his behavior is not good so what i have to do please help me .and 2 year contract means 24 months or 23 months including 1 month vocation ?

Expatguru said...

Waseem,

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

Anonymous said...

SALAM
I would highly appreciate your help, if I can get an answer for my concern, that is Iam a medical doctor, Can I resign on immediate basis without 1 month notice in saudi arabia.
Thank you

Expatguru said...

Anonymous,

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

junmar dizon said...

good day. sir may i know what would i do, im really confused by my situation right now. i have signed my first contract here in saudi bur i dont finished my 2 years in my first kafel he sell us in another saudi. we have another contract signed (with new kafel) but it dont indicate jow many years i must stay working with him. the contract just says we have vacation after two years from the date of arrival in saudi. am i obliged to work for them for two years? do i have the right to resign after i finished my two years from the date of arrival in saudi? thanks

Expatguru said...

Junmar,

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

Anonymous said...

Dear Expat Guru,

Thank you for the support you provide to all in need.

I signed a contract in February 2015 for an indefinite period. I was informed in December 2015 that my contract will not be renewed beyond February 2016. They asked me to request for a 3 month extension in order to buy more time to look for a job.

As Feb 2016 approached, my colleague resigned and my direct manager emailed the CEO to extend my contract by at least 6 months. However, the HR director (he was in CC) sent an email to the CEO requesting him to extend my contract till February 2017 and the CEO replied back to the email saying that 'He had no problem with that' if I shape up.

This email correspondence was forwarded to me by the HR director as information that the CEO had agreed to extend my contract till Feb 2017.

Can you tell me what I should do now? My contract ended on Feb 4th, 2016 and I have entered my 2nd year now. Should I ask to sign a contract till Feb 2017? Or is this 1 line email enough for the extension of my contract till Feb 2017? Please do note that the CEO had mentioned 'If he shapes up'. Please note that he wants me to 'shape up' even though I scored 84% on my annual evaluation.

Your support would be much appreciated.

Thank you and regards,

Anonymous



Expatguru said...

Anonymous,

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

Anonymous said...

Good day. I have been working here in jeddah for more than 8 years now. I want to take my final exit on my 9th year. I want to finish my contract on september 23 2016, but my iqama will expire on september 13 2016. Do i need to renew it or i just have to let my employer process my final exit earlier before my iqama expires? Pls help me. I dont want to renew my contract. Thank you.

Expatguru said...

Anonymous,

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