Saudi authorities regulate employer-employee contractual relationship to brace for COVID-19 impact


The Kingdom of Saudi Arabia has announced that itis regulating the contractual relationship between the employer and the employee to brace for the economic impact of the novel coronavirus. 

The Ministry of Human Resources and Social Development had issued a notification according to which it said that keeping in mind the government decides to reduce the working hours for people in the kingdom owing to the pandemic, employers and employees will have to regulate their business relationship.

As per the ministry, employers and employees will have to agree within the first six months to “either reduce the employee’s wage to adjust with the actual work hours or grant the employee a local leave to be deducted from his/her deserved annual vacation or granting him/her an exceptional leave, according to Article 116 of the labor law.”

However, if it emerges that the employer has benefited any way by obtaining government subsidies to deal with the situation, then the employer cannot be allowed to terminate the contract of employment.

“In addition to that, the employee will have the right to terminate his/her work contract,” read the statement.

“The Ministry also allows a temporary benefit from the services of off-labor-market expatriates through the “Ajeer” portal as an alternative to recruiting from abroad, as the Ministry aims through this decision to protect workers during such circumstances from being terminated or losing their contractual benefits. The portal will soon offer the businesses to publish names of their excess workers,” the ministry said further.

Officials have recorded more than 1.6 million cases and more than 96,344 deaths in 193 countries since the virus emerged in China in December.

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