Saudi Arabia Takes Affirmative Steps for Private Businesses, Their Employees

DESPARDES — Saudi authorities have reportedly allowed private businesses to reduce working hours and cut employees’ wages during the next six months, while taking into account their daily or weekly working hours.

In the absence of “guaranteed employment” and unemployment coverage as practiced in advanced nations, the Kingdom’s move to balance off relations between workers and private business owners during the coronavirus pandemic is a good one akin to providing a safety net, some experts say.

Saudi workforce is a hybrid of local and a sizable number of expatriates. Both end up benefiting from the announcement during the pandemic, they said.

There are 35 million foreigners who form the Gulf’s economic backbone. Nearly 11m of them are in the kingdom — almost 30% of the population.

Their wages shall not be reduced by more than 40 percent of the total salary. After six months, business owners must return to paying full wages to their employees.

Employees do not have the right to object to the reduction as long as it does not exceed the agreed 40 percent.

The law also allows business owners the right to approve the timings of their employees’ annual leave depending on work conditions.

It also allows employers to give their employees their annual leave at the same time or alternately.

Employees have the right to seek an unpaid leave if the business owner approves. Speaking to DesPardes, structural engineer Sajjad says he’s at home due to the pandemic and without pay. He can handle the family expenses for the next 2 or 3 months, he said.

Subsidies have been granted by the Kingdom to private sector companies crippled by the effects of the pandemic. But they cannot terminate employment contracts under the current situation before the six months period is over.

Expats in the Gulf — 35 million foreigners form the Gulf’s economic backbone, face the dilemma as firms shed jobs because of the pandemic and oil price crash, and governments move to protect citizens’ jobs and wages. Should they stay or go?

For many expats like Engr. Sajjad, the announcement by Saudi is a good news.

The original report appeared in Arab News