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Employee Rights When an Undertaking is Transferred in Saudi Arabia

Article 18 of the KSA Labour Law provides for employees to transfer by operation of law from one employer to another, pursuant to a change in the corporate ownership of the employer or the part of the business in which they are employed (including the sale of a business or part of a business as a going concern, and the merger of two companies, or demerger). However, such transfer is only possible upon a special application to the Ministry of Labour whose approval is discretionary and it can take up to 2 years for the process to be completed. In the absence of Article 18 applying, transfer of employees is effected through a process of termination and re-hire.

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This information was contributed by Abdulaziz A. Al-Bosaily Law Office in association with Clyde & Co.
This entry was posted in Transfer of Undertakings on .