Many employers, lacking adequate knowledge of the provisions of Saudi labor law, resort to abusive methods when terminating an employment contract — thus violating the law’s provisions and depriving the employee of the rights that the law guarantees.
The law does not specifically define arbitrary dismissal, but rather addresses the arbitrary termination of a contract of employment contrary to the provisions of the law, whether by the employer or the employee.
However, when a court rules that an employer has terminated a contractual relationship in violation of the provisions of Articles 74 and 75 of the Labor Law, has dismissed an employee before the end of the contract or has terminated an indefinite contract without notice to the employee indicating the reasons for the termination, then the dismissal is held to be arbitrary.
What are the provisions in these two articles? They specify the circumstances in which a contract of employment may end: When both parties agree to terminate it, provided the employee’s consent is in writing; when the period specified in the contract expires; at the discretion of either party to an indefinite term contract; when the employee reaches retirement age; or force majeure.
In the case of an indefinite term contract, either party may terminate it for a valid reason, with written notice to the other party at least 30 days before the termination date if the employee is paid monthly, and at least 15 days for others.
If the party terminating the contract does not comply with the notice period, they must pay the other party compensation equal to the employee’s current wage for the duration or balance of the notice period.
If one party suffers harm because a contract has been terminated for a reason deemed to be invalid, they are entitled to indemnity to be assessed by the Commission for the Settlement of Labor Disputes, which will consider the termination circumstances and the actual, potential and moral damage.
If an employee is dismissed without good cause, can they ask for their job back? Yes, an employee who has been dismissed for no valid reason may ask for reinstatement; the claim will be considered in accordance with the provisions of the labor law and the litigation regulations before the Commissions for the Settlement of Labor Disputes.
Some people believe the Labor Law to be complicated. Nevertheless, it is important for both employers and employees to study its provisions before signing a contract of employment — and both would also benefit from more education and awareness of labor rights throughout the employment system.