Saudi Arabia: No salary deduction without working hour reduction

Riyadh: Saudi Ministry of Human Resources and Social Development made it clear that private sector companies cannot deduct salary without reducing the working hours of employees.

Explaining provisions of Article 41 of the Labour Law, the Ministry said that private companies belonging to sectors that are affected due to coronavirus pandemic can deduct the salary of the employees up to 40%, however, they have to reduce working hours in the same proportion.

Force majeure

It calls the pandemic as force majeure. Under extraordinary situation beyond the control of employer and employee, Force majeure changes their liabilities listed in the contract.

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The employer can go for any of the following three options

  1. Grant paid leave for certain period.
  2. Deduct wages upto 40 percent after reduction working time in proportion.
  3. Grant unpaid leave only after taking workers’ approval.

Termination of contract

The Ministry also said that an employer can terminate the contract of the employee only after meeting three conditions

  1. Expiry of the period of 6 months from the date when the firm decided to reduce working hours or suspend work temporarily.
  2. Expiry of the situation that resulted in the reduction of salaries.
  3. The employer did not get any benefit from the State to tackle the situation.

It may be noted that action will be taken against the employers who violate the provisions of Article 41.

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