Okaz/Saudi Gazette report

RIYADH — The Ministry of Human Resources and Social Development has stressed that it is not permissible for private sector companies to reduce the worker’s wages without reducing his working hours.

“The reduction of the wages must be commensurate with the reduction in working hours. However, the permissible reduction of wages must range between one percent and 40 percent and that is under some strict conditions,” the ministry said in a statement while reacting to queries with regard to the provisions of Article 41 of the Labor Law and its explanatory note.

The ministry said that it has set two conditions for the wage cut; first the firm has been affected the repercussions of the coronavirus crisis; second, the wage reduction should be commensurate with a reduction in working hours.

The ministry pointed out that there is no minimum limit for reducing working hours. However, the maximum limit for reducing wages is 40 percent. The salary cut in place of reduction in the actual working hours must be from the limit set for the actual working hours in Article 98 of the Labor Law, whether it is in the month of Ramadan or other months as the case may be.

The ministry reiterated that the firm shall not dismiss a worker on the principle of force majeure, in the event that it does not benefit from the government subsidy, unless the conditions referred to in the provisions of Article 41 and its explanatory note are fulfilled. Force majeure clauses are contractual clauses which alter parties’ obligations and/or liabilities under a contract when an extraordinary event or circumstance beyond their control prevents one or all of them from fulfilling those obligations.

Replying to queries whether the firm has the right to terminate the contract of the employee whose work hours have been reduced or who has been given exceptional leave, the ministry clarified that the employer does not resort to the termination of the work contract considering that this circumstance or this situation is part of the description of force majeure, except after three basic conditions are met.

The first condition is a period of the six months shall be completed following the procedures taken as part of the precautionary or preventive measures that required reduction of the working hours or suspension of work for a specific period of time. The second condition is the expiry of the situation that warranted application of the procedures related to the reduction of wages, and full or part of the annual leave and exceptional leave. Thirdly, it must be proven that the employer did not benefit from any subsidy from the state, regardless of the type of benefit that was availed to confront this situation.

Concerning the exceptional leave, the ministry affirmed that it is not permissible to compel the worker to obtain unpaid exceptional leave without his consent, since the request for unpaid leave is the right of the worker. The ministry pointed out that the work contract is considered suspended during the period of the exceptional vacation, when it exceeds 20 days, unless the two parties agree that the contract is considered not suspended in the event of exceeding this period.

Regarding the worker’s right to refuse to apply the options in Article 41 of the Labor Law regulations, the ministry said that the worker has no right to refuse these procedures except for exceptional leave, where the worker must agree to it. The ministry stated that the firm can apply three options in the case of a worker: it can grant the worker leave with pay for a certain period; then apply the other option by reducing the wage by no more than 40 percent; and then it can grant unpaid leave in the event of his approval.

The ministry stressed that punitive measures shall be taken against firms that violate the provisions of Article 41 of the executive regulations of the Labor Law. It also stated that the provisions of Article 41 apply to the expatriate worker of a firm affected by the current crisis, and to all those covered by the Labor Law.