According to the Saudi Ministerial Decision, due to the current economic situation in the country Private Sector is allowed to reduce the salaries of their employees by 40 percent, companies are also allowed to terminate the contract.
The new decision is currently pending still the circular is not issued.
This Decision is made somehow private due to the possibility of ex-pats as well as local employees. The decision is signed by the Saudi Ministry of Human Resources and Social Development. Employer are allowed to made changes in a labour contract for a period of six months.
According to the decision:
Employers can reduce the salaries by 40 percent for the wage period of next six Months.
Private sector companies can also reduce the hours of work and allow the termination of contract to compensate for less salary.
The new amendment has additionally remembered an arrangement for which the business would be permitted to cut wages even the individual in question profits by the stimulus given by the government, for example, those for helping pay labourers wages or exception from government expenses.
The choice additionally focused on that businesses are not permitted to fire any worker, except if three conditions are met.
- First, the passing of a half year since the proportions of salary cut has been taken.
- Lessening pay, annual leave, and outstanding leave were completely utilized.
- The organization proves that it’s confronting financial difficulties because of the conditions.
Following options are available for companies;
- The employee must be given with annual paid leave.
- No more than 40 percent salary cut is allowed.
- Private companies can send their employees to unpaid leave if they want to go to their home countries.