Sunday, November 1, 2015

Changes to Saudi Labor Law - How it affects you

Finally the much awaited changes to the Labor Law have come into force on 24th October, 2015. Let's take a look at what it means for expats working in Saudi Arabia.

The last time Saudi Labor Law was modified was way back in the year 2006. After repeated announcements that several sections of this infamous law were going to be amended, the so-called reforms finally took shape and became law last week, a full six months after it was published in the gazette. As expected, most of the laws were amended to suit Saudi employees, but there are a few critical ones which directly affect expats.

First, let us talk about probationary period. This has now been increased from 90 days to 6 months. The law says that the period can be extended up to six months "with the employee's consent". I can hear you saying "what rubbish" as we all know what would happen if an employee did not agree! But this is not all. Read on.

As per the new law, an employee cannot be transferred from one location to another "without the employee's written consent". There is a rider to this. An employer can transfer an employee "in an emergency" temporarily for a period of up to 30 days without obtaining his consent. How atrocious can this be! So now we have a situation that any sponsor can theoretically make his employee graze camels in the desert for a month as a punishment posting in the guise of an emergency and this is legally allowed! Note that the word "emergency" has not been defined and it is up to the sponsor to define it himself. 

The notice period for those of you who are on indefinite-term contracts has been increased to 60 days on either side from the present 30 days. For those on definite-term contracts, it is still 30 days on either side. But here is the catch. The new law says that if either the sponsor or the employee do not give the notice period, they can "agree on the compensation". Come on, the whole issue is disagreement which is why there are so many cases before the labor court. What a let down!

Interestingly, the new labor law has defined what the compensation has to be in case either party terminates the contract "for an unlawful reason". This is the whole point. A sponsor can now simply say that the termination was lawful and no one knows how long it will take in the labor courts to even resolve whether the termination was lawful or not, forget about the compensation.

Hang on, here comes the most important part. Article 80 of the existing labor law has been amended. This deals with how a sponsor can kick you out without paying your End of Service benefits and without a notice period - hold your breath - all done legally as per the new law. If an employee is absent from work "unauthorizedly" for 30 days in a year or 15 days consecutively, he can simply be sacked without notice and without ESB. So, all a sponsor needs to do is to claim that his employee has been absconding for more than 2 weeks and that's it! He not only need not pay any ESB, he also gets to hire a new employee because of this "huroob" (absconder) report in the system! Some reform.

If you already feel bruised after all the battering, don't worry, there is a bottle of balm given by the new labor law. In case a sponsor terminates you and you are in the notice period, you are entitled to take off for 8 hours per week with pay to go and search for another job. Wow!

All salaries are to be paid only via bank accounts and not as cash. Give us a break. Most of the low-paid workers here haven't got their salaries for months together. They don't care whether it is through a bank or some other way, they just need their money so first arrange for that.

There are a few more amendments like maternity leave for expectant mothers, etc., but what I have mentioned above are the most significant ones which affect expats. The rest are all more to make Saudis work in private sector.

I was eagerly looking forward to write something positive in the new labor law but unfortunately could not find one. When will we ever get to have a system without exit/re-entry visa? When will we get to have our own passports in reality and not just in paper? When can we get to bring our families with us, irrespective of what our visa title is? And finally, when will we get to be treated as human beings? 

Each time there is talk of reform, expectations go high only to crash like nine pins. Sadly, this time was no exception. 


Ikram Khan said...

Well said, Expatguru! This place is becoming increasingly unbearable for expats.

Jim Fletcher said...

This amendment to the labor law was eagerly awaited and it is obvious that it is just an eye wash. There simply isn't any push from the top to really be fair.

mohmedaakib said...

Dear Expatguru,
kudos to your work to the expat community.
My iqama profession is computer programmer I submitted family visit visa of my father on 18th october 2015 and chamber of commerece done on same date. but till now no reply come.kindly advice me some procedure to be done

Unknown said...

Whatever, I lived in KSA for 5 years and enjoyed my stay and had a very good life there; I do not know why you crib about everything in Saudi which is a means of livelihood for many expats. Yes there might be a few aberrations but then which place or man is perfect. I had my own issues with paper work etc. being done but looking at the big picture it is not as bad as you would like to project all the time.
It was in fact very beneficial and peaceful place to live in

Muhammed Abbas said...

I came to KSA with great hopes to save some money. The way I was treated here is shameful. My passport is with my kafeel and there is no way I can go out. He is yet to pay my last 3 months salary. There are many of us like this. Dont know what to do. How can I get out of this hell?

Oommen Mathew said...

For the vast majority of workers in the kingdom, it has become a point of no return. They cannot go back as they have huge debts at home. They cannot stay here because their sponsors treat them like ***t. There are thousands of expats in other GCC countries who are better off than us. In Oman, you get to keep your passports. There is no such thing as an exit or a re-entry visa. Those who claim that this is paradise are living in a fool's world.

Anonymous said...

What the new law says on the expats who did not return to KSA to resume duty after vacation.

Expatguru said...


This is not a new law, but an "amendment" to the existing law. That means, all the laws which were there earlier, except for those items which have been amended, will still be valid. If you did not return after your vacation, your sponsor is now legally authorized to declare you as an absconder and there will be a ban on your re-entry.

Anas MK said...

Does the new labor law have anything to say about GCC ban? For example if I leave my current company in Saudi on emergency leave (as company is not giving exit since the past two year) and do not come back but instead go to say oman, will there be a ban implemented on me in Oman as well? Please confirm, as I need an authentic source who can confirm the same.

The Engineer said...

thumbsup for this post!

Faisal said...

Thank you sir for providing us detailed information on it!

Jake W said...

I worked for a US defense contractor in Dharahn (B3H corp) they and Saudi Naval Support (SNS) issued business visas vs iquamas to 80% of the US workers. This saved B3H money and allowed B3H to fire for negligent reasons which left the employee with little recourse. In April 2015, I filed a labor case and the ministry cited SNS as the opposing party w/o my knowledge because they were the company of record. All I sought was two months of earned salary and a housing allowance (40k sar). Smug and arrogant, SNS ended up loosing the case that was just ruled on by a three judge panel (Jan. 2016).I think the fine was around 50k. Odd, that SNS didn't just pay me and avoid the case/penalty. Tellingly, the court ruled against my wage claim even in light of SNS's proven issuance of the wrong visa which effectively blocked a labor case over wages. I have no recourse in the US. That ruling is now on appeal. However, I am now blackballed for filing against SNS (through the grapevine) and while I have a job offer the new visa sponsor won't issue a visa.

Even when you 'win' you 'loose',