Disciplinary Procedures under Saudi Labour Regulations

Disciplinary Procedures under Saudi Labour Regulations Disciplinary Procedures Saudi labour rules and regulations (Regulations) provide a range of disciplinary measures that the employer should consider before finally terminating an employee’s contract. The key procedures afforded to employers under the Regulations are as follows: 1. The employer should issue first a verbal warning to the employee followed by a written warning if the employee persists on committing the wrongdoing. 2. A fine may be imposed in the form of salary deductions. However, the fine should not exceed five day salary per month for a single offence. 3. The employer is also permitted, under the Regulations, to cancel or defer the employee’s allowances for a period not exceeding one year. 4. In addition to periodic allowances, the employer can defer expected promotions of the disciplined employee for a period of maximum one year. 5. Under the Regulations, temporary suspension is another disciplinary option available to the employer. During the suspension period, the employee is not entitled to a salary. However, the suspension without salary should not last for more than five days. 6. Final termination with or without end-ofservice benefits is the last option. Termination without end-of-service benefits

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is permitted if the employee commits a deliberate offence against life, property, honor or honesty. However, none of the penalties stipulated under the Regulations should be imposed until the employee has been notified in writing of the offence, the penalties and the reasons for their imposition. The employee has the right to defend himself and even object to the penalties by submitting his objection to the Labor Dispute Committee within fifteen days from the date of receiving the notification from the employer. If the penalty constitutes fines accruing to the employer, the penalty must be recorded in a special register. The register should include the employee’s name, salary, reasons and circumstances for imposing the penalties. The fines are then placed in a special account and used for the benefit of the employees after the employer obtains prior approval from the Ministry of Labor to do that. Most importantly, the employee should not be charged with a disciplinary offence after a lapse of more than 30 days from the date the offence was discovered, nor should a disciplinary penalty be imposed after a lapse of more than 30 days from the date the inquiry of the offence was made and the employee was found guilty. The Employer must always remember that no disciplinary measure may be taken against an employee for any act committed outside the workplace unless such an act is related to the owner or the manager and falls within the employee’s duties.

Disciplinary procedures under Saudi Labour Regulations

Preliminary Steps Disciplinary measures are indeed essential tools for a healthy management in a workplace. However, before embarking on a disciplinary action, the employer should take few preliminary steps to avoid hasty decisions and reduce the risk of liability. Some of these steps include, but not limited to, the following:  Investigation The employer should not penalize an employee on mere accusations. Rather, before taking any action, he should diligently investigate any behavioral or performance problems caused by the employee. This is particularly important if the problem is serious or the behaviour warrants termination. Many people consider investigations to be time consuming, disruptive and costly but in fact, most investigations simply consist of gathering information from key witnesses and giving the employee the opportunity to defend himself against the accusations.

To be effective, the document should be accurate and fair, written in a factual, precise, sufficient and detailed manner, and, as a general rule, the employer should always give the employee a signed copy of the documentation. In conclusion, discipline is crucial in a workplace and can never be risk-free. However, an employer who properly follows disciplinary and termination procedures is likely to avoid the risk of facing labor charges and costly lawsuits. For further information please contact: Majed K. Zeineddine

Contacts

Associate, Jeddah Al Ghazzawi Professional Association Jeddah Commercial Centre, Al Ma’ady Street, PO Box 7346 Jeddah 21462, Saudi Arabia T: +966 2 653 1576 (ext. 548) F: +966 2 653 2612 [email protected]

 Documentation The major problem for most employers is that they do not document the employee’s wrongdoings. Many employers believe they do not need to document and can simply talk to the employee about his performance. Unfortunately, this does not always work. Effective documentation is expressly stated in the Regulations, and it has many advantages. It can be crucial if the facts are inconsistent or incomplete, or the problems become so severe that the employer contemplates termination. Documentation can also help prevent costly labor lawsuits by educating employees about performance issues and providing them with an opportunity to improve. Employees who have been given written notice and the opportunity to correct it are less likely to sue.

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The content of this briefing does not constitute legal advice and should not be relied on as such. Specific advice should be sought about your specific circumstances. If you would like to receive more copies of this briefing, or would like to receive Al Ghazzawi briefings from other practice areas, or would like to be taken off the distribution lists for such briefings, please email [email protected]. www.ghazzawilawfirm.com

Disciplinary procedures under Saudi Labour Regulations