dr. zaid mahayni - implementing regulations to the saudi arabian labor law - 16 may 2016

THE NEW IMPLEMENTING REGULATIONS

TO THE LABOR LAW

BY DR. ZAID MAHAYNI

16 May 2016

MINISTERIAL DECISION

• By way of Ministerial Decision No. 1982 dated 6

April 2016, the Saudi Arabian Ministry of Labor

issued new implementing regulations (the "New

Implementing Regulations") to the Labor Law.

• The New Implementing Regulations became

enforceable immediately upon their publication in

the 22 April 2016 Official Gazette.

2Dr. Zaid Mahayni - 16 May 2016

INCIDENTAL AND TEMPORARY WORKERS

• The Labor Law subjects incidental and temporary

contracts only to some provisions governing regular

full-time contracts.

• The New Implementing Regulations state that any

incidental or temporary employment relationship

would be considered as a regular employment

agreement if it continues beyond 90 days.

• This characterization may entitle incidental or

temporary workers employed for more than 90

days to such things as end-of-service benefits.


INTERNAL WORK POLICY

• The New Implementing Regulations are

accompanied with the model of an internal work

policy.

• Employers are required to ensure compliance with

the model policy and adapt their existing internal

work policies to it by no later than 16 October 2016

(i.e. the date falling six Hijri months from the

publication of the New Implementing Regulations

in the Official Gazette).

• Employers must ensure that revisions to existing

policies do not affect previously extended worker

rights.4Dr. Zaid Mahayni - 16 May 2016

ONSITE REGISTERS

Employers must keep onsite:

• A register listing all workers, their job titles, ages, nationalitiesand identification card numbers;

• A register specifying the salaries of all workers, disbursementdates and any applicable deductions;

• A register specifying sanctions applied against workers anddescribing the context surrounding each incident;

• A register specifying the time of arrival to, and departurefrom, work;

• A register specifying all training extended to Saudi nationals;

• A register containing the medical examination results forworkers working in hazardous environments; and

• A file for each employee containing a copy of his employmentcontract and all copies of certificates and informationpresented to the employer.


PASSPORT CUSTODY

• The New Implementing Regulations prohibit employers from

retaining the passports of their workers, except at their own

request and subject to the signing of a passport receipt form

in Arabic and in the worker's language.


DISABLED WORKERS

• The Labor Law requires employers with 25 or more

workers to employ a number of disabled workers

equivalent to 4% or more of the total workforce.

The Labor Law however did not define what

constitutes a disability for the purposes of that

requirement.

• The New Implementing Regulations now defines

disabled persons as any person holding a

certificate to this effect from a local governmental

hospital or from the Ministry of Social Affairs.


DISABLED WORKERS

• The New Implementing Regulations set out

measures that employers must implement for the

employment of workers with specific types of

disabilities (e.g., movement-related, visual and/or

auditory impairments, mental handicaps).

• These include, for instance, the obligation to adapt

building access and facilities in compliance with

relevant architectural requirements set out in the

Saudi Building Code.


OVERTIME WORK

• The New Implementing Regulations state that,

generally, workers cannot be required to work

overtime in excess of 720 hours per year, except

with their consent.

• It is possible to require workers to perform up to 15

minutes of preparatory work and another 15

minutes of supplemental work a day without having

to count such time within the limitations on daily

work hours.


OVERTIME WORK

• In respect of janitors, the New ImplementingRegulations restricts their employment for periodsexceeding six continuous hours. It is not possible toemploy janitors or guards (excluding civil guards) formore than 12 hours a day or 48 hours a week. Workhours during Ramadan are reduced to 10 hours a dayor 36 hours a week.

• For those with intermittent work duties such asmechanics, technicians, freight workers and gas stationworkers, their daily working hours are limited to 10(eight during Ramadan) while their weekly work hoursare limited to 48 (36 during Ramadan). Workers withintermittent work duties shall be entitled to at least 10hours of continuous rest during any 24-hour periods.


HOLIDAYS AND VACATIONS

• The New Implementing Regulations stipulate that the holidays

to which workers are entitled by law are as follows:

- Eid Al Fitr Holiday: 4 days starting from the day which

follows the 29th of Ramadan (as per the Umm AL Qura

calendar);

- Eid Al Adha: 4 days starting from the day of Arafat; and

- The national day, which falls on the first day of the Al

Mizan horoscope (as per the Umm AL Qura calendar).

Where the national day coincides with either the Eid Al

Fitr or the Eid Al-Adha holiday, workers shall not be

entitled to an additional day of holiday.

• Should the above holidays coincide with a weekend or an

annual vacation, workers are entitled to recover the days

which coincided.11Dr. Zaid Mahayni - 16 May 2016

HOLIDAYS AND VACATIONS

• The Labor Law allowed workers to take unpaid leave with

the employer's approval. If her/his unpaid leave exceeds

20 days, the employment contract would be deemed

suspended. The New Implementing Regulations now

clarify that if unpaid leave is taken in the context of a fixed

term employment contract, the term of the contract is

extended by the number of days of unpaid leave taken.

• The New Implementing Regulations also provide that, if a

worker's sick vacation coincides with her/his annual

vacation, her/his annual vacation shall be suspended until

the completion of that worker's sick vacation. Weekends

however cannot be compensated if a worker falls ill during

them.12Dr. Zaid Mahayni - 16 May 2016

TRAINING

• As required by the Labor Law, employers with 50

workers or more must train a number of Saudi

workers equivalent to 12% or more of their total

workforce.

• The New Implementing Regulations require

employers to put in place a register of training

programs offered to Saudi workers, as well as a

register of Saudi workers who have taken over

positions previously-occupied by expatriates. An

annual report must also be submitted to the Labor

office.


TRAINING

• The New Implementing Regulations enumerate

cases where employers would be allowed to

recover from workers the cost of the training they

received. These cases include the premature

termination of the training program by the worker,

the termination by the employer of the employment

contract for grave cause prior to the period agreed-

upon with the worker, the resignation of the worker

without grave cause prior to the period agreed

upon with the employer.


SAUDIZATION AND SAUDIZED POSITIONS

• The New Implementing Regulations have listed 18

positions that may only be occupied by Saudi

nationals.

• The New Implementing Regulations also requires

that:

- female make-up and accessories stores only be

employed by Saudi females; and

- workers engaged in the sale, repair of mobile

telephones and mobile telephone accessories

consist only of Saudi nationals.


EMPLOYMENT CONTRACTS

• The New Implementing Regulations

include a standard form employment

contract and have marked those principles

in it that are compulsory and must be

replicated in any employment contract


REMOTE LOCATIONS

• The New Implementing Regulations complete the Labor Law by

defining remote areas as:

- regions which are located 50 kilometers from populated areas,

in case of the existence of a connecting roadway;

- regions which are located 25 kilometers from populated

areas, in case of the inexistence of a connecting roadway; or

- populated areas with no infrastructure or services.

• Amongst other obligations applicable in remote locations are the

obligations to provide stores for the sale of clothing and food and the

provision of entertainment facilities (e.g., sports facilities), schools for

workers' children if neighboring schooling facilities are insufficient,

and prayer areas.


EMPLOYMENT OF YOUTHS

• The New Implementing Regulations prohibit the employment of

youth between 15 and 18 years of age in fields that expose their

health, safety, or even behavioral manners to harm, such as:

- Work in mines, quarries, or the extraction of metallic materials

from the ground;

- Industries posing health hazards;

- Strenuous activities; or

- Activities which involve bodily risks, such as those involving

sharp cutting equipment.

• The New Implementing Regulations prohibit the employment of

youth under 15 years of age, except within the context of authorized

and closely supervised educational or training programs.


VIOLATIONS AND SANCTIONS

• The New Implementing Regulations require the

creation of a Committee for the Imposition of

Sanctions for Work Violations in each

administrative region.

• The Committee must adhere to the schedule of

sanctions issued by Ministerial Decision No. 4786

dated 11 October 2015.

• Violations that are subject to severe sanctions

must be referred to the competent court.


VIOLATIONS AND SANCTIONS

• The New Implementing Regulations order the

formation of another committee for the assessment

of appeals against, or requests for the settlement

of, administrative decisions relating to the violation

of the Labor Law.

• Appeals, or "objections", against administrative

decisions can be made within 60 days of the date

on which the administrative decision was notified to

the individual concerned. However, appeals do not

suspend the enforceability of the administrative

decision.


SETTLEMENT REQUESTS

• Settlement requests may be presented, provided that

(amongst other things):

- The penalties applied are in excess of SR 100,000 or an

order was made for the closure of the establishment;

- The violation was not repeated more than three times

and no settlement was concluded in respect of the

previous violations;

- steps must have been taken towards the remediation of

the situation in respect of which the sanction applies.

• If a settlement is reached, a proposal is made to the

Minister of Labor for his decision. The settlement must be

implemented within 15 days, or would otherwise be

considered as void.


PAYMENT OF FINES

• Fines must be paid within 15 days of the date on their

notification. The Minister of Labor may interrupt services

extended to employers for failure to pay fines on time (e.g.,

the recruitment or the renewal of the work permits of

expatriate workers).


THANK YOU