Expert Insight

Dealing with force majeure in “COVID-19” crisis in the Saudi labor system Lawyer . Bandar AlMagames

The global economy has been affected by a health crisis linked to the outbreak of the "Corona virus “COVID-19” by taking precautionary measures including imposing curfews that have had significant impact on restricting human life in order to fight the disease. Associated with such measures, the effectiveness of the essential pillar of the work contract has been disrupted. The question arises whether is the Corona epidemic a force majeure or an emergency? Many international companies opted to terminating the employment contracts of their workers.

The Kingdom of Saudi Arabia is part of the world order and has been a pioneer in taking precautionary measures to protect man as a result of work related disruptions caused by the government and private sector measures. In order to safeguard the private sector employment contracts the State provided substantial financial support to pay the wages of employees in the private sector. The Custodian of the Two Holy Mosques King Salman bin Abdul Aziz has issued a Royal Decree to assume the workers’ wages in the private sector at the State's expense, at 60% of the full wage for a period of three months, under the government program "Saned".

The Minister of Human Resources has issued Article (41) in addition to the Executive Regulations of the Labor Law, which is a restriction to achieving force majeure except after the lapse of six months. These measures are consistent with the events in the Kingdom of Saudi Arabia and the world as a whole and the accompanying preventive and precautionary measures to confront any exceptional event described as a "force majeure" ,

These procedures were carried out through a number of practical steps that the worker and the employer must implement and adhere to, namely:

First: With regard to wages: Paragraph (A/1) of the said article, explains that the reduction of the worker's wage, shall be commensurate with the number of actual working hours. It also restricted the reduction to a maximum of (40%) of the actual full actual pay, only during the next six months as to be agreed upon. Worker shall not be entitled to refuse the wage reduction if it does not exceed 40%.

Second: With regard to annual leave: Paragraph (B/1) indicates that the employer may grant the worker annual leave, according to the discretion of the employer given the best interests of the business venture.

Third: The Extraordinary Leave: Paragraph (C/1) indicates that the employer shall grant exceptional leave to the worker, during the next six months, whenever the worker requests the same.

The Ministry commented that any entity that has not been affected by the prevailing conditions shall not be entitled to invoke the provisions of Article 41 in any action it takes against its workers.

Its noteworthy to say that we have witnessed many initiatives by the Saudi government to support the private sector financially as electricity bills were forgiven and government fees exempted.

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