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.

Monday, February 6, 2012

Nitaqat nightmare

My earlier post (click here) on changes to Iqama profession for expatriates working in Saudi Arabia evoked such a huge response that I decided to do a follow-up post on the same.  Many concerned expats wanted to know about the status of their companies, whether they were in the red or yellow categories.

Before going into the details, a small recap. As already mentioned, companies in Saudi Arabia have been categorized into Green, Yellow and Red depending on the level of Saudization carried out. There is also a so-called "excellent" category above the green category, but this is of not much concern to expatriates in Saudi Arabia, so let's forget it for the moment. Those companies with the least Saudization, i.e., red category are in really big trouble. The iqamas of expatriates working in these companies are not being renewed after 26th November, 2011. Even though officially denied by the Government, most expats in these companies are even afraid to go on vacation in the fear that their exit/reentry visas would be converted into exit visas at the airport by the immigration. There is no smoke without fire, they say, so the suspicion is that there might have indeed been some cases which have happened this way. There is no way to confirm this, though. With a system so opaque, one cannot but sympathize with these people.


Time has been given until 22nd February, 2012 for employees in the red category and yellow category to find themselves jobs in the green or excellent cateogories. Expatriates have been waived from getting clearance from their current sponsors in red category to move over to jobs in the green range. Sadly, companies employing 9 persons or less do not fall under Nitaqat program so people working in these firms still need a release or NOC from their sponsors to move into better jobs. Those employees in the red category who are unfortunate not to find suitable jobs in the green category would be forcibly be given Exit along with their families upon expiry of their iqamas. In other words, they have time to look out for a job in the green category until their iqama expiry.


People in the yellow category are only slightly better off than those in the red category. Until 22nd February, 2012, these companies must convert themselves into green category, i.e., they must improve their Saudization levels substantially. In case of failure to do so, i.e., if they are still in the yellow category, employees working in these companies have the option of finding themselves jobs in green category without any kind of approval from their current sponsors. However, for those who continue with their current sponsors, their iqamas would be renewed only if they have put in less than 6 years stay. If not, it is curtains for these people and Exit would be stamped on their passports.


I would like to caution expatriates who are transferring themselves from the red and yellow to green categories, who have unresolved disputes with their current sponsors. You have to necessarily follow all procedures just as in any normal case with the sole exception that you do not need the consent of your current sponsor (applicable for yellow category from 23rd February, 2012 and for all in the red category). Take a look at my previous post for reference (click here). Note that you MUST definitely file your claim with the Ministry of Labor within 6 months from the date of your transfer to green category. Failure to do so with forfeit any future claims you may have. Also note that you CANNOT go on exit/reentry or be sent on exit within the first 6 months of your transfer to green category, unless and until your new sponsor has a written confirmation from your previous sponsor in red / yellow category that there are no claims against you from the previous contract. Somehow, I get a sick feeling of expats being held like a dog on a long leash!


Now comes the most crucial question on how to find out which category a particular company is in? It is quite pathetic that leave alone moving into green category, expatriates do not even have access to the basic information of their company's 'color'. A saving grace is the website of the Saudi Ministry of Labor. Click on this link, but before that keep someone beside you who can read Arabic because this web page, so important for expatriates, is completely in Arabic. Some customer service!

Type your iqama number in the space provided and click on the 'Submit' button. Your name along with your company's category should appear in Arabic. Again, please note that this is applicable for expatriates whose companies have a minimum of 10 workers or more. I really feel sorry for the large majority of unskilled expatriate workers, who do not even have access to internet. Where is the promised sms service which was supposed to provide instant information about an expatriate's category? I would like to appeal to readers to support these poor guys and pass on information about their company status, lest they are sent on final exit one fine day without even knowing the reason. 


The coming days are going to be very crucial and would decide the fate of several expatriates working in Saudi Arabia.