Expat-friendly new Saudi labour law

Expat-friendly new Saudi labour law


Dubai: Saudi Arabia’s new labour law for its 7 million strong foreign work force, majority of whom are Indians, offers better working conditions like increased leave and higher end-of-term benefits.

Quoting from the new law, the Saudi Ministry of Labour said the law protects the rights of Saudi and expatriate workers and ensures balanced relations between employers and employees.

“The new law with 245 articles and 16 chapters is an achievement for workers. It increases annual leave from 15 to 21 days and to 30 days for those who have completed five years of service," the ministry was quoted as saying in Arab News.

The law considers amounts due to the worker or his heirs as “first rate privileged debts," adding that the worker and his heirs shall, for the purpose of settling them, be entitled to a privilege over all the employer’s properties.

In the case of bankruptcy of the employer or liquidation of his firm, the aforementioned amounts shall be entered as privileged debts and the worker is paid an expedited amount equivalent to one month wage prior to payment of any other expenses including judicial, bankruptcy or liquidation expenses, the law said.

The new law, which was passed by the Cabinet on 26 September 2005, urges employers to pay end-of-service award of a half-month wage for each of the first five years and a one-month wage for each of the following years.

If a worker is detained or taken into custody by the competent authorities in cases related to work or occasioned by it, the employer shall continue to pay the worker 50 per cent of the wage until the case is decided, provided that the period of detention or custody shall not exceed 180 days.