Saudi Arabia: Summary of Recent Labour and Employment Law Developments

In the past month, there have been several labour and employment law developments, chief among them: i) adding a new clause to the Labour Law; and ii) various measures have been put in place in order to tackle the impact resulting from COVID-19.

I. Ministerial Resolution 13//1441 Amending the KSA Implementing Regulations to the Labour Law

Ministerial Resolution 13//1441, equivalent to 6 April 2020, was issued on 6 April amending the implementing resolution to the Labour Law (issued in January 2019) by adding a new clause – 41 – which provides the following:

• In the event the Kingdom adopts measures as recommended by an international organisation to provide for adjusted working hours or to avoid a situation falling under Article 74 (5) of the Labour Law, which provides for termination of employment by reason of force majeure, an employer will be able to agree any of the following measures with an employee for a six month period following the introduction of such measures:
• Reducing the employee’s salary in correspondence with a reduction in the employee’s working hours;
• Putting the employee on annual leave as part of his annual leave entitlement;
• Putting the employee on exceptional leave in accordance with Article 116 (unpaid leave) of the Labour Law
• Termination of employment following the implementation of such measures will not be justified if the employer received assistance from any government programs during this period;
• Nothing in this resolution prevents or inhibits the employee’s right to terminate his employment contract.

II. COVID-19 Measures

Various measures have been put in place in order to tackle the impact resulting from COVID-19.

MHRSD Mandates

The Ministry of Human Resources and Social Development (MHRSD) has mandated the following:

• 14 days’ paid leave (additional to all usual leave entitlements under the labour law) must be granted to employees in categories which are identified as high risk with regard to COVID-19. These include those with autoimmune disease, cancer, respiratory illness, chronic illnesses and pregnant women or breastfeeding women as well as employees aged 55 years and above. Such employees are not required to work from home during this 14 day period;
• Employees outside of the Kingdom due to the suspension of commercial flights are regarded as being on official leave over and above the minimum under the Labour Law (the Ministry has not stated whether this should be paid or not but merely that its status is that it is authorised leave); and
• Employees ordered to quarantine (even if self-imposed) for 14 days are on official leave over and above that under the law (the Ministry has not stated whether this should be paid or not but merely that its status is that it is authorised leave).

Work from Home

The MHRSD instructed private sector establishments on 18 March 2020 to suspend work at their main office / headquarters and instead activate work from home (WFH) procedures. Companies are also required to reduce the number of employees working in their branches, offices and other facilities to a maximum of 40% of the headquarters (HQ) workforce. The WFH initiative was initially for 15 days, but is now understood to be until Ministry of Interior and MHRSD advise otherwise. Certain sectors are exempt from the above requirements. MHRSD will issue the exemption on application.

Sectors still operating workplaces are required to adhere to the following:

• Maximum of 40% of the workers should attend the premises;
• Employers with a workforce of more than 50 employees must introduce mandatory temperature checks;
• Ensure that sufficient space is available between workers in the workplace and in their accommodation;
• Close all health clubs and nurseries located at the company’s HQ; and
• Require all employees to disclose if they exhibit symptoms of high temperature, coughing or shortness of breath, or have mixed with an infected or suspected case of COVID-19.

Furlough Programme for KSA Nationals

On 3 April, KSA announced a furlough programme for the private sector, the current details of which are:

• The employer may apply to the General Organisation for Social Insurance (GOSI) to cover 60% of its KSA national employees’ salaries up to a maximum of SAR 9,000 per employee through the SANAD programme (unemployment benefit programme). If the employer has 5 employees or less, then all of them will be covered, otherwise up to 70% of the employer’s KSA national workforce may be covered through this initiative.
• The payments will be made for three months: May, June and July 2020. The employer does not have to top up the employees’ salaries during this period to 100% of what they would normally be. The employee does not have to work during this period when the employee is receiving funds directly from the SANAD programme through GOSI.
• The KSA employee must have been registered with GOSI prior to 1 January 2020.
• The employer must be able to demonstrate that it is in a sector badly impacted by COVID-19. The following sectors are exempt from this programme: financial services (including banks, insurance companies, exchanges), communications, food retail outlets and food companies.
• The employer must pay wages to all other employees, both KSA nationals and foreign nationals during this period.
• The employer must have paid its employees their complete and accurate salaries during the first quarter of 2020.
• The employer must undertake that once the three month period is over (end of July), the employer will resume paying such employees their salaries in full.

For more information on these articles or any other issues involving labour and employment matters in Saudi Arabia, please contact Sara Khoja (Partner) of Clyde & Co at sara.Khoja@clydeco.ae or visit www.clydeco.com.