Saudi Arabia – The Labor Law Amendment to treat COVID-19 as a force majeure.

The Ministry of Human Resource and Social Development of Saudi Arabia has issued an amendment to the executive regulation of Saudi Arabian Labor Law by adding the following article (Article 41 of the Labor Law):

If  the government has taken measures to tackle certain cases or circumstances, which require the reduction of the working hours or has taken precautionary measures to limit the aggravation of these cases or situations, described as “force majeure”, in paragraph 5 of Article 74 of the labor law, the Ministry allows employers, with the consent of its employees, within six months from the start of the enforcement of these procedures, to amend the contractual working conditions, as follows:

  • Reduce employees’ wages to reflect the actual work hours worked.
  • Grant employees annual leave.
  • Grant employees exceptional leaves in accordance with the Article 116 of the Labor Law.

 

However, following this, the termination of the employees’ employment contracts are not legitimate once it becomes evident that the employer has benefited from this Article or any other government subsidies to deal with this situation. While, the employees have the right to terminate their employment agreements in accordance with the law.

Separately, the Ministry has temporarily enabled the recruitment of expatriate employees through Ajeer portal as an alternative to recruiting employees from abroad. Ajeer portal was previously available only for Saudi national candidates. Employers with redundant staff will soon be able to list the affected employees on Ajeer for recruitment by alternative employers.

Download PDF:KSA Labor Law Executive Regulations Amendment