Friday, February 24, 2012

Sponsorship transfer in Saudi Arabia

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.

13 comments:

Tony said...

Brilliant article as usual, Expatguru. ESB is usually paid only a couple of days before an employee's contract terminates before transfer, so he hardly has any time left to get his rightful dues from his sponsor.

Shaiku said...

very informative article...will keep in mind while leaving :-)

Neil said...

I thank God for stumbling upon this blog. If you don't mind Expatguru i have a question. I have been working in a retail company for the past 5years and 5 months as a Visual merchandiser but my profession in iqama is personal driver. I was hired here locally.

Two weeks ago my company terminated my services without warning or any reason. My salary for February was also withheld and my housing allowance was not given to me. Now I am jobless and no income. What is the odds of me winning if I file a case in the Labor Ministry?

Can I demand a release as I was terminated illegally? will i be entitled to ESB? I was also paying for my iqama and paid them 4000sr for my transfer, is it legal?Please advise me Expatguru. Thank you and God bless you more abundantly.d

Expatguru said...

Neil,

Please do not hesitate. Immediately file a case with the labor court. Also inform your embassy as they will help you out with a lawyer who can speak Arabic. Good luck!

Rizwan M said...

Dear Expat Guru,

First of all I really appreciate your hark work that you are putting into this blog to educate Expats in Saudi Arabia with the facts.

Secondly I have a concern about transfer of sponsorship, My wife is a doctor and I came here with my wife as a dependent, after securing a job I transferred my Iqama to that company and everything went normal, now my wife has resigned and going back on permanent exit. although all my credentials have been transfered to the other company and my kafeel , profession etc has changed. do I need to change the visa on my passport, if yes then how and where??? can I keep living here with the same Visa and different kafeel..kindly assist.

Expatguru said...

Rizwan,

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.

Rima Ahmad said...

Thank you for the information. I would like to ask if , as a wife who is sponsored by her husband, and has hrr children on her same passport, could i transfer my sponsorship without my children, baring in mind that they stay on my passport. Thank you

Expatguru said...

Rima,

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.

Eliza said...

Hello my name is Eliza Indyk and i from Poland I'm looking for a dodations for my foundation please somebody help me

khalid rathore said...

Need your expert opinion.i will be obliged
I had my wife brought here on a family visa.(on my sponsership ).she is a doctor and lucky found a job and got the sponsership changed..the private clinic took over the sponsership.unfortunately the private clinic didn't run Long and finally had to shutdown .we managed to find a new job but the sponser is not ready to give a release to the new establishment.instead he wants to return back the sponsership under my name.My question is can I give a direct consent to the new establishment to take over the sponsership.or is it necessary to change it first under my name.
My third question is..does jawazaat change sponsership from family visa to professional visa these days? Kindly reply.i will be obliged

Expatguru said...

Khalid,

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.

jacob said...

Sir,

I need your advice, I am currently working as an admin assistant, a supplied manpower. This is the story. I Am hired by Company A on July 2010. They supplied me to company B. after 2 years on July 2012, I renewed my contract for another 2 years.(Did not signed anything for the 2nd contract). On July 2014 my contract will be completed (4 years), I filed an exit and i guess my employer will agree to that. But the company B where I was supplied was planning to re hire me but they require me to return under the sponsorship of company C.

Question: Is there any rights for the the company A to complain or to file a case if they knew that i go back to KSA under the sponsorship of company C supplied to company B?

Thanks and regards

Expatguru said...

Jacob,

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.