One of the very frequently asked questions by expatriates working in Saudi Arabia pertains to their End of Service Benefits. I had covered this briefly in my earlier post (click here to view it). Something which is closely related to this topic is the transfer of sponsorship. This has become even more important now due to the recent changes in the Nitaqat program.
As mentioned earlier, the deadline for change of sponsorship from the 'red' and 'yellow' categories to 'green' and 'excellent' categories has already expired. While everyone has been focussing on Saudization and the number of jobs this exercise is supposed to create for unemployed Saudi citizens, the plight of expatriates who have been affected by this has found hardly any mention in the mainstream media in the kingdom. Creating employment for its own citizens is a right of the host country. At the same time, protecting the legal entitlements of its expatriate workers is also equally important. Sadly, the vast majority of workers, particularly from the non-supervisory labor category hardly know their rights.
After February 23, 2012, the red and orange category employers must not officially exist. (The deadline has not been extended at the time of writing this article despite a lot of demands for the same). So, what are they supposed to do? Simply put, they have to just fold up or sell their ownership to a 'green' or 'excellent' sponsor, unless they hire the minimum number of Saudi citizens to stay afloat. What happens to the rights of employees in these companies?
I would like to bring to the attention of expatriates precisely to a very important provision in the Saudi Labor Law. Article 18 specifically states that if an ownership of a firm is transferred through merger, partition or otherwise, the rights of the workers prior to the change shall be protected. In other words, the service is deemed to be continuous. So who has the liability towards workers? The law says that both the predecessor as well as the successor are jointly liable. However, if the predecessor agrees to transfer all his workers' rights to the successor and if the workers agree in writing to this, only then is the predecessor relieved of his liabilities.
Please note an important point here. I had already mentioned in my earlier article (click here) expatriate rights on End of Service Benefits. In case of transfer of ownership due to merger or partition, the new owner would have no right to say that the ESB of his workers accrued from the previous employment is not his responsibility, in case it is not already settled by the previous sponsor. This is guaranteed by Saudi Labor Law under Article 18. In case the employees object to his rights being transferred to the new owner, the previous sponsor has no option but to settle all his dues including ESB. Invariably, almost all sponsors do this. They probably consider it too degrading to ask written permission from their employees regarding transfer of their rights to the new employer, so they take the easier and more 'honorable' way out - simply settle the dues and wash the hands off! Also, the new sponsor doesn't want to have any of the old baggage. How many workers are literate enough to know their rights and how many have the time, energy and money to fight it out in the labor courts in case they do not get their dues? Sadly, this is the reality.
Know your rights. Ignorance is not bliss, it could be dangerous. Because as I always say, the only thing certain in Saudi Arabia is uncertainty.