Saudi employers given green light to cut wages, hours

But businesses hit by coronavirus can change contracts only with employees’ consent, ministry says

Saudi private-sector employers whose businesses have been crippled by the coronavirus pandemic have been told they can cut their employees’ wages and working hours.

But they may do so only with the employees’ consent, and the reduced wages must accurately reflect the number of hours worked, the Ministry of Human Resources and Social Development said.

The ministry also moved to allay fears among some private sector staff, both Saudi and expatriate, that unscrupulous employers could use the coronavirus crisis to exploit their workers. “Workers can report any violation through the ministry’s website, channels and social media platforms,” Saad Al-Hammad, director of Human Resources Affairs at the ministry, told Arab News.

In addition, employers who have benefited from state subsidies, such as the SR9 billion ($2.4 billion) fund created last week to compensate Saudi workers for the effects of the pandemic, may not terminate employment contracts. Employees, however, retain the right to do so.

The ministry said its aim was to protect employees from dismissal or loss of contractual benefits during the pandemic. It would continue to regulate the labor market, mitigate the economic effects of the virus outbreak on the private sector and protect the interests of both parties in the labor relationship, it said.

Saudi legal counsel Dimah Talal Al-Sharif said amending the contractual relationship between employer and employee in this way was permissible under the legal concept known as “force majeure,” which applied to the coronavirus pandemic.

“The ministerial decision aims to limit any attempt to tamper with people’s rights as employees, and to define the limits that both parties must agree on first, while also reflecting the reality,” AlSharif told Arab News.

Workers can report any violation through the ministry’s website, channels and social media platforms.