Amendments in KSA Labour Law to Cover COVID-19

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Amendments in KSA Labour Law to Cover COVID-19

Due to the effects of coronavirus, there have been several modifications to the laws of Saudi Arabia. The Ministry of Human Resource and Social Development (MHRSD) of KSA issued multiple directives to deal with the employee entitlements during COVID-19. 

These resolutions are forwarded to keep the labour safe from the pandemic as they are the vital assets. In this regard, Article 41 is introduced in the Implementing Regulation of the Labour Law of KSA. Labour lawyers in Saudi Arabia are employing these strategies to keep the nation safe.

Terms of Article 41 by MHRSD

According to the Hijri calendar, this section of the law is applied after 13/8/1441H which corresponds to April 6, 2020. It allows employees and employees to agree on any of the below-mentioned terms for 6 months to control the spread of pandemic or save any situation from worsening.

  • Deduction in employees’ wages is linked with the reduction in their working hours
  • Providing employees annual paid leave which is their right as per the law
  • Implementing an unpaid leave period for the employees

These are the prerogatives of the employer which exempts the employees from challenging them. In case the employer wants to implement annual leave for the employee to play their part in lowering the rise of crony affected patients then it should be followed with employee’s approval.

When it comes to a reduction in employees’ wages, it should be according to the reduction in working hours. For example, an employee who has been working for 20% lesser working hours should get a subtracted salary by 20%. Whereas, the deduction limit of salary is 40%.

Employees and employers should sign an addendum to the employment contract after getting consultation from labour lawyers in Saudi Arabia. The paperwork should be completed as per the government orders so that both parties can keep a record and claim any false terms legally.

Regulations by Government for COVID-19 Control 

In case the government issues precautionary measures to control the spread of pandemic or orders the reduction of working hours, then Article 41 is applicable. The government of KSA can take measures mentioned in Article 41 depending upon the situation for 6 months.

The explanatory memorandum of Article 41 which is devised to control the rise in labour count who are infected form viral disease states that paid annual leaves or reduction in salary in case of lesser working hours should be adopted with the mutual consent of employees and employers.

As per the salary reduction clause of Article 41, the company is not allowed to do it if it is being benefitted from Government subsidies. In case the organization is getting assistance state-sponsored subsidy scheme for KSA nationals then it should pay off the salaries as before.

Article 41 and Termination of Employees

According to Article 41, employers are ordered not to terminate the employees for 6 months, starting from April 2020 and ending in October 2020. This rule is applicable unless or until the employer is unable to pay the salaries even after:

  • The period of 6 months is over and the company is facing financial instability
  • They have employed all the possible option including salary reduction and paid leaves
  • The company has not benefitted from any subsidy or government for 6 months

In the case of wrongful termination, the arbitrary dismissal compensation should be paid. Labour lawyers in Saudi Arabia get employee’s rights which are subjected to the employment contract. This compensation should not be less than two months’ salary as per the law of KSA.

  • For unlimited contracts’, 15 days’ wage is counted as compensation for each year of service
  • For limited employment contracts, the payment is provided for the remaining period of employment stated in the contract

The clauses of Article 74 of the KSA Labour Law are also applicable during these 6 months. It recognizes the termination of employees whether the working unit or company is closing. Labour lawyers in Saudi Arabia suggestfollowing the General Organization for Social Insurance (GOSI).

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