Compensation of 74,000 riyals for a worker who was unfairly dismissed – final ruling
In a new victory for labor rights, the Labor Court in Saudi Arabia issued a final ruling obligating an employer to pay financial compensation exceeding 74,000 riyals to a worker, after it was proven that the establishment had arbitrarily terminated his services and excluded him from the social insurance system without his knowledge, in a case that highlights the legal protection provided by the Saudi judiciary to workers.
Details of the labor dispute
The case stems from a dispute between an employee and their employer, where the employer terminated the employee's contract without just cause. Not only that, but the employer also removed the employee from the records of the General Organization for Social Insurance under the guise of "resignation," all without the employee's knowledge or consent. The case file reveals that the employer attempted to circumvent the employee's rights by pressuring them to sign a new contract with another subsidiary, under a different job title and with a new start date, thus jeopardizing the employee's continued employment and acquired rights.
Financial evidence and documents
During the court proceedings, the employer attempted to dispute the employee's monthly salary, but the court relied on the compelling evidence presented by the plaintiff. This evidence included an official certificate from the Social Security Administration and bank statements proving that the employee received a monthly salary of 6,550 riyals, and that the employment contract began on December 1, 2016. The defendant, on the other hand, failed to provide any documents to refute these facts.
Legal documents and compensation
The court based its ruling on articles of the Saudi Labor Law, specifically Articles 77, 84, and 111, which regulate an employee's rights in cases of wrongful dismissal, end-of-service benefits, and accrued leave. The court emphasized that transferring an employee from one establishment to another company without following proper procedures does not absolve the employer of their obligations, nor does it justify the arbitrary termination of the initial contract.
The ruling detailed the financial rights as follows:
- 27,417.28 Riyals: Compensation for wrongful termination of the contract.
- 38,459.57 Riyals: End-of-service bonus for the period of employment.
- 8,438.73 Riyals: Compensation for unused vacation balance.
The context of judicial reforms and the importance of governance
This ruling comes within the context of the significant development witnessed by the judicial system in the Kingdom of Saudi Arabia, specifically the labor courts, which aim to foster an attractive and secure investment environment that guarantees the rights of all parties involved in the contractual relationship. Such rulings are of paramount importance at both the local and economic levels, as they send a clear message to establishments about the necessity of strict adherence to labor laws and affirm that circumvention through changing legal entities or manipulating social security data does not negate workers' rights.
The ruling acquired the status of final and binding after the expiry of the statutory period for objection (30 days) according to Article 187 of the Sharia Procedures Law, without the employer submitting an objection, which makes it immediately enforceable.
