Translation of the attached article:
Employees may be made redundant for various reasons, but this does not mean that they lose the rights guaranteed to them by the Saudi Labor Law. There are obligations placed on the employer, as well as financial and legal rights that must be fulfilled, in addition to procedures that ensure the employee is protected from any unlawful termination of the contract.
In this article, we explain employee rights in case of redundancy, the reasons for which employees may be made redundant, and the most important steps that can be taken to claim rights when a dispute exists.
What Is Meant by Employee Redundancy?
Employee redundancy means ending the employment relationship between the employee and the employer based on a decision issued by the employer, whether this is due to the expiry of the contract term, restructuring of the establishment, the existence of a legal reason that permits contract termination, or any other reason recognized by the Labor Law.
Employee redundancy differs from disciplinary dismissal. The employment relationship may be ended while the employee retains all their legal rights, whereas disciplinary dismissal may be linked to the existence of a violation that requires certain procedures to be taken according to the provisions of the law.
Because the employment relationship may end by a decision from the employer or at the employee’s request, it is important to learn about the difference between resignation and contract termination, so that you understand the effect of each case on entitlements, end-of-service benefits, and compensation.
Employee Rights in Case of Redundancy
In the case of making an employee redundant, there are a number of rights they are entitled to in this situation. Below, we explain the most important employee rights in case of redundancy as follows:
Receiving All Financial Entitlements:
The employee has the right to receive all their financial entitlements when the employment relationship ends. These include the salary due up to the last working day, and any allowances, commissions, incentives, or other amounts earned during their employment period and not yet paid.
End-of-Service Benefit:
If the conditions for entitlement to the end-of-service benefit are met, the employee is entitled to receive it according to the period of service and the way the employment relationship ended. It is calculated according to the provisions stated in the Labor Law.
After knowing the employee’s right to the end-of-service benefit upon redundancy, you can use the end-of-service benefit calculator to obtain an initial estimate of the benefit due according to the period of service and the reason for ending the employment relationship.
Compensation for Contract Termination in Cases Stipulated by Law:
If it becomes clear that the employment contract was terminated in violation of the law or without a legitimate reason, the employee has the right to claim compensation for the damage suffered.
This depends on the nature of the contract and the circumstances surrounding its termination. The amount of compensation differs from one case to another according to what the law determines or what the parties agree on in the employment contract.
If the employee was made redundant without a legitimate reason or in violation of the provisions of the Labor Law, it is important to learn about compensation for arbitrary dismissal, so that you know when you have the right to claim additional compensation alongside your financial entitlements.
Payment in Lieu of Accrued Leave Balance:
If the employment relationship ends and the employee has a balance of annual leave that they have not used, they are entitled to financial compensation for the remaining days. This compensation is calculated based on the wage due to the employee at the time the contract ends, unless they have already received all their leave during the employment period.
Obtaining a Service Certificate and Clearance:
After the employment relationship ends, the employee has the right to obtain a service certificate that includes the basic information related to their period of employment and the nature of their job.
It must not include anything that may harm them or affect their future job opportunities. The employee also has the right to receive their personal documents after completing clearance procedures in accordance with the applicable regulations.
Reasons for Employee Redundancy in Saudi Arabia
The employer does not have the right to make an employee redundant without reasons. These reasons are stated in the Saudi Labor Law and include the following:
The Existence of an Agreement in the Employment Contract Allowing Termination of the Employment Relationship:
The employment contract may include clauses regulating the cases in which either party may terminate the contractual relationship, provided that these clauses do not conflict with the provisions of the Labor Law.
If there is a prior agreement on specific reasons for terminating the contract, and the agreement is valid and compliant with the regulations, the employer may rely on it when making the employee redundant, while complying with all legal rights and procedures resulting from that.
Force Majeure or Suspension of the Establishment’s Activity:
The establishment may be forced to make some employees redundant if it faces exceptional circumstances or force majeure that makes continuing the activity impossible or leads to the partial or complete closure of the establishment.
Assaulting the Employer or Officials:
If the worker assaults the employer, the responsible manager, or one of their supervisors during work or because of work, this may be considered one of the cases in which the Labor Law permits ending the employment relationship. The occurrence of the assault must be proven, and legal procedures must be followed before issuing the service termination decision.
Breach of Job Duties:
The employee is obligated to perform the assigned tasks and fulfill their job obligations according to the employment contract and the establishment’s regulations. If they refuse to perform their duties or repeatedly breach them despite being warned, this may result in disciplinary procedures that may reach termination of the employment relationship if the legal reasons for this are available.
Lack of Competence or Failure to Develop Skills:
Some establishments may face cases where an employee is unable to perform their job duties with the required efficiency, or does not respond to the training and qualification needed to develop their performance in line with work requirements.
Harming the Establishment’s Interests or Disclosing Work Secrets:
Deliberately harming the establishment or disclosing its professional or commercial secrets is considered a serious violation that may justify ending the employment relationship, because it may result in material or moral damage that affects the establishment’s activity or reputation. This requires proof of the violation according to the approved legal procedures.
Absence Without a Legitimate Excuse:
The employee is required to regularly perform their work during the specified working hours. Repeated absence or interruption from work without a legitimate excuse is one of the cases that may expose the employee to accountability. If the absence exceeds the limits specified by the Labor Law, and after completing the legal warning procedures, the employer has the right to end the employment relationship according to the legal provisions.
Before accepting a redundancy decision or treating it as a valid procedure, you may need to know whether an employee may be dismissed without notice, so that you understand the cases that require prior notice and when the employee has the right to claim notice allowance.
How to Claim Employee Rights in Case of Redundancy
There are certain procedures that should be taken to claim employee rights in case of redundancy. These procedures include:
- Reviewing the reason for terminating the employment contract and ensuring that it complies with the provisions of the Labor Law.
- Collecting all documents related to the employment relationship, such as the employment contract, salary slips, and the service termination decision.
- Claiming financial entitlements from the employer before resorting to the competent authorities.
- Submitting an amicable settlement request when a dispute exists between the two parties.
- Filing a labor claim if an amicable solution cannot be reached or if the employee does not receive their rights.
If the employment contract is fixed-term and was terminated before its expiry date, you may need to know about terminating a fixed-term employment contract before its expiry, so that you understand its effect on compensation and the entitlements that may legally be claimed.
When Do You Need a Lawyer to Claim Employee Rights in Case of Redundancy?
There are certain cases where you need a lawyer if you are an employee who has been made redundant and you are claiming your rights. These cases include:
- When there is a dispute over the legality of terminating the employment contract.
- When the employer refuses to pay the financial entitlements.
- When claiming compensation for unlawful dismissal.
- When filing a labor claim or objecting to a judgment issued in the case.
- When the case includes large financial amounts or documents that require legal review.
If you have been made redundant and want to verify your rights, Nawaf bin Awad Al-Harbi Law Firm provides the necessary legal support to help you protect your rights and take the appropriate procedures according to the Saudi Labor Law.
Contact now with the best labor cases lawyer to know your legal rights when you are made redundant, with a review of the reason for contract termination, calculation of your financial entitlements, claiming legal compensation, and representation before the competent authorities to ensure that you obtain all your rights according to the Saudi Labor Law.
Conclusion
Knowing employee rights in case of redundancy helps the employee obtain all their legal entitlements and avoid mistakes that may affect their claim for legal dues. Resorting to a lawyer in case of employee redundancy is essential, as it helps the employee understand all their entitlements and obtain their full rights without deduction.
Frequently Asked Questions
Is Employee Redundancy Considered Dismissal?
Employee redundancy is not considered dismissal from work and is not considered a violation as long as it is carried out according to the law. Rather, employees are made redundant in certain cases stipulated by law, and these cases must be complied with.
Is an Employee Entitled to Compensation When Their Services Are Terminated?
An employee’s entitlement to compensation depends on the reason for ending the employment relationship and the method of contract termination. If the contract is terminated according to the provisions permitted by the Labor Law, while complying with legal procedures and paying all financial entitlements, there will be no additional compensation.
However, if the contract termination is unlawful or carried out in violation of the law or the employment contract clauses, the employee has the right to claim compensation in addition to any other financial rights determined by law.
When Does an Employee Have the Right to Claim Compensation?
The employee has the right to claim compensation if the termination of the employment contract harms their rights in violation of the provisions of the Labor Law, or if the employment relationship was ended without a legitimate reason or without complying with legal procedures.
