SAUDI ARABIA Law and Practice Contributed by: Dana Halwani and Leanne Farsi, Derayah LLPC
lims are reduced to six hours per day for six days per week, with a total of 36 hours per week. Article 99 of the Labour Regulation provides that statutory work - ing hours may be increased to nine hours per day or decreased to seven hours per day for certain work categories. According to Article 101 of the Labour Regulation, workers may not work continuously for more than five hours at a time, with breaks for meals, rest and prayers of not less than half an hour at a time. Breaks are not counted as working hours, but work - ers may not remain at the workplace for more than 11 hours per day. Article 106 of the Labour Regulation provides that the maximum actual working hours may be increased to up to ten hours per day or up to 60 hours per week without a day of rest in certain circumstances, includ - ing “if the worker is intended to face extraordinary work pressure”. In such situations, overtime is payable at 150% of the employee’s base wage. The circumstances brought about by the COVID-19 pandemic resulted in reductions in the working hours of many employees. In light of this and other changes to contractual relationships caused by the pandemic, the HRSD issued Resolution No 142906 of 13 Sha’ban 1441 Hejra corresponding to 6 April 2020, inserting Article 41 into the Implementing Rules of the Labour Regulation, which is applicable to situations where the government has taken measures in relation to a situa - tion that necessitates a reduction in working hours or has implemented precautionary measures to prevent the worsening of a situation. It allows employers to take certain measures to lessen the adverse impact of the pandemic within six months of the beginning of government-imposed restrictions taking effect. Such options include reducing an employee’s salary in pro - portion to a decrease in their working hours. On 13 January 2021, the HRSD announced that Arti - cle 41 would no longer be effective in relation to the COVID-19 pandemic. 4.4 Termination of Employment Contracts Under Saudi Arabian law, staff can be dismissed in the following circumstances: • non-renewal of a fixed-term contract;
• for a cause listed under Article 80 of the Labour Regulation; and • termination of an indefinite-term contract under Article 75 of the Labour Regulation. Fixed-Term Contract A fixed-term contract comes to an end when its term expires. Therefore, an employee can be dismissed by being given notice that the contract will not be renewed. In such circumstances, no compensation is payable other than the statutory end-of-service award, and repatriation costs for non-Saudis. Article 80 Article 80 allows an employer to terminate a contract for certain specified causes, most of which involve misconduct. Article 80 (2) permits termination “if the worker fails to perform his essential obligations arising from the employment contract, or to obey legitimate orders, or if, in spite of written warnings, he deliber - ately fails to observe the instructions related to the safety of work and workers as may be posted by the employer in a conspicuous place”. This is a catch-all provision and is applicable to any breach of the essence of the contract of employment, but the breach must be material. Ordinary, trivial errors are punishable only by disciplinary measures. Any dismissal under Article 80 requires that the employee be given a chance to justify their conduct. For this, a meeting must be called, at which at least two man - agement representatives must be present, and which must be minuted. If the employee fails to respond within a reasonable time, it may be assumed that they have no valid objection to the termination, or that they are not interested in prolonging the employment relationship. Dismissal under Article 80 can only be invoked in isolated instances, and not, for example, to reduce a company’s workforce. Article 75 Article 75 of the Labour Regulation permits the termi - nation of an indefinite-term contract, where the salary is paid monthly, for lawful cause, upon 60 days’ notice by the employer, or 30 days’ notice by the employee, although the term “lawful cause” is not defined. In principle, it can include any reason, such as:
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