Firms to be penalized for mass sacking of Saudis

Firms to be penalized for mass sacking of Saudis

Khaled Abal Khail
Khaled Abal Khail

RIYADH — The Ministry of Labor and Social Development will halt recruitment and sponsorship transfer services for firms that involve in mass sacking of Saudis.

According to a directive issued by Labor and Social Development Minister Ali Al-Ghafis, only companies in dire financial state or those on verge of closure will be exempted from penalties.

But any decision for mass sacking will be intimated to the concerned labor office two months before the date of enforcing it so as to avoid penal action.

Khaled Abal Khail, spokesman of the ministry, said that the directive is applicable to all large and medium companies.

He said that termination of service of a group of Saudis — whose percentage is more than one percent of the entire workforce at the firm or a group of 10 Saudi employees, whichever is higher, during the year from the date of the last act of dismissal — will be considered as mass sacking.

The ministry will halt recruitment visa services for one month for firms which fail to inform the labor office about mass sacking within the stipulated period of time.

In case of mass sacking of up to five percent of Saudi staff, recruitment and sponsorship transfer services will be halted for 90 days. If mass sacking is from 5 to 10 percent, recruitment and sponsorship transfer services will be halted for 180 days.

In case of sacking of 10 to 15 percent or 15 to 20 percent or more than 20 percent Saudi staff, halting of recruitment and sponsorship transfer service will be for 360, 540 and 720 respectively.

The mass sacking will be allowed if it is intimated to the labor office two months before with all necessary documents.

A firm must submit a financial study about its position with justifications for mass sacking, statement about the number and names of Saudis facing termination with justification for dismissal of each and every one of them, statement about the number and names of non-Saudis working at the firm with the equal status of Saudis facing termination and their job description, and the measures taken by the firm to avoid mass sacking.

The minister directed that the concerned labor office will examine the report from the firm and pronounce its opinion on it within 45 days.

The office must consider the financial condition of the firm, and explore the prospect of alternative solutions to avoid mass sacking by appointing Saudis in place of foreign workers.

The labor office has also to consider finding alternative jobs for these Saudi staff at that firm or any other firms belonging to the employer.


  1. The concern of the administration for its Saudi citizens is palpable and heartening but penalizing companies for sacking staff is not the right way because the moment a person, including me, knows that he will not be thrown out of his job, he starts taking it easy and will do only the minimum amount of work which is absolutely necessary in order to retain his job. Some private companies may be very well off but for other small companies, which are facing stiff competition and have to struggle in order to remain in business, will find it very difficult to carry this additional burden. Today an expatriate worker works very hard, employs his skills, sometimes even tricks to keep the show running because he knows very well that he will retain his job only if he ensures profits for his company. There is nothing wrong with Saudization but if quality and economic growth are going to be compromised then small businesses will be wiped out and will face closure. The owners of companies which are going into loss will simply close down their businesses and invest their money somewhere else leading to further unemployment. Common sense dictates that only with intelligent planning, higher productivity, efficiency and other time-tested principles of economic growth will any place achieve progress economically.

    • I think you did not read the word “mass”
      Abdul Latif Jamil Co. in recent days laid off a thousand Saudi employees after the cabinet approved item (77) which allows private companies to fire Saudis without prior notice.

      • The basis of giving salaries to employees is profits made out of their business. If profits plunge due to non-productivity then how can any company pay their employees?

  2. I think this directive is completely out of context. The motive behind establishing an Establishment or a company whether it is by individuals or as partners is to generate profit and to keep the business floating for many years to come. But from what we see now is that companies will not be able to operate in healthy condition to meet the demand and requirement of Ministry of Labour or their working force.

    Every now and then new rules and regulations appear which made so difficult private sector to run its business let alone to be profitable. The outcome will be simply liquidation and a complete loss. It seems this is what is happening now.

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