Salient Features of the Saudi Labor Law

Republic Act No. 8042

And

Other Laws Affecting OFWs

         (Salient Provisions)

Salient Features of the Saudi Labor Law

Presented by:

ATTY. CESAR L. CHAVEZ JR. 

(Welfare Officer/POLO-OWWA/ Philippine Embassy, Riyadh, KSA)

during the  “OPEN FORUM”

(Know your Rights and Obligations as an OFW in the Kingdom)

ON SITE LABOR EDUCATION PROGRAM (OLEP) 

organized by

KALIPUNANG KAAKABAY NG MANGGAGAWANG PILIPINO SA SAUDI ARABIA (KAKAMPI-KSA)

& GUARDIANS NEWHOPE BROTHERHOOD INTERNATIONAL, INC. (GNBII)

held at New Islamic Center Auditorium, 2nd Industrial Area, Riyadh, Saudi Arabia

*************

Community Leaders Training (OLEP)

I . Introduction

     1.1 Legal Basis 

          –  Constitution (Sec.18, Art. 2; Sec.3, Art. XIII)

     1.2  Definitions

         – Migrant/OFW – Section 3 (a) & Section 2 (a) IRR

         – Overseas Filipinos – Section 3 (c)           

II. Pre – Employment

     2.1  –  Illegal Recruitment – Section 6 (a to m)

               Placement Fees (Excessive/No Placement) – Section 6 (a)

               Inducement – Section 6 (d)

              Contract Substitution/Alteration – Section 6 (i)

              Withholding of Travel Documents – Section 6 (k)

              Failure to deploy  – Section 6 (1)                                                  

–  Economic Sabotage – Committed by a Syndicate/Large Scale

              (Section 6  second to last par.)

                – Persons Criminally Liable – last par.

                – Penalties – Section 7

2.2          Employable Age – Section 2 (k) IRR

2.3          Prohibition on Officials & Employees – Section 8

2.4          Exemption from Travel Tax/Airport Fees – Section 35

III. During Employment

     3.1  –  Resource Center (POLO) – Section 19           

               Mandated Services

               24/7 Operations

                  Highly Problematic Areas – Provision of Lawyer/Social Worker

     3.2     – Confidentiality of Information – Section 20, Section 73 IRR

     3.3  –  Duty to Enforce Emp. Contract – Sec..23 (b2), Sec. 51 IRR

     3.4  –  Legal Assistance – Section 19 (a), Section 24 (b), Section 26

     3.5  –  Priority Concerns-Duty to Assist – Section 27

     3.6  –  Country Team Approach – Section 28

     3.7  –  Non-Increase of Fees – Sec. 35, RRI LOI 537 (Sec.5)

Salient Features of the Saudi Labor Law

INTRODUCTION:

* Saudi Labor Law lRoyal Decree No. M/51 l23 Sha’ban 1426/ 27 September 2005

* Hegira calendar applies unless otherwise stated in the work contract lThe governing text is the Arabic text

* This presentation is intended for guidance of overseas Filipino Workers in the KSA.

Coverage-  all workers except:

  – Domestic Helpers and the like

  – Sea workers on board vessels with a load of    less than 500 tons

  – Non-Saudi workers performing specific task for a period not exceeding 2 months   – ETC. (Art. 7)

 *NULL & VOID- condition that contradicts SLL   including release & settlement of worker’s right  unless more beneficial to the worker ( Art. 8) 

WORK CONTRACT- is  a contract concluded  between an employer and a  worker, whereby  the latter undertakes to work under the management or supervision of the former for a wage. (Art. 50, SLL)

 The work contracts for NON-SAUDIS shall be written and of specified period. Otherwise, the duration of the work permit shall be deemed as the duration of the contract. (Art. 37, SLL)

The  work contract shall primarily include: (Art. 52)

Name of the employer, venue ¡Name & Nationality of the Worker, Identification ¡Wage agreed upon ¡Type and location of work ¡Date of employmentDuration of the contract if fixed, subject to the provisions of Art. 37 (and Art. 55) 

The  work contract shall primarily include: (Art. 52)

*  Name of the employer, venue

* Name & Nationality of the Worker, Identification

*  Wage agreed upon

* Type and location of work

* Date of employment

Duration of the contract if fixed, subject to the provisions of Art. 37 (and Art. 55)

BASIC WAGE vs. ACTUAL WAGE

A. Basic Wage – all that is given to the worker for his work by virtue of a written or unwritten work contract, regardless of the kind of wage or its method of payment, in addition to periodic increments.

B. Actual Wage – the basic wage plus other due increments decided for the worker for the effort he exerts at work or for risks he encounters

in performing his, or those decided for the worker for the work under the work contract or work organization regulations.

Includes commission, percentage,  allowances, increments, grant, reward and other privileges. (except, Art. 86 for ESA comp.)

Wage – is the actual wage (Art. 2)

RIGHTS & OBLIGATIONS

Worker:

1) Payment of Wage- weekly, monthly or commensurate to work completed. Payment during working hours at the workplace, or in bank with the consent of the worker. (Art. 90)

*Deductions must be with written consent of the

worker except Art. 91, 92 & 93 ( 5 day wage,

10%, 25%, 50%)

* Wrongfully detained in work related cases or

occasioned by it, entitled to 50% of the wage for

180 days max. If acquitted, no evidence or

charge invalid entitled to balance. If convicted,

employer cannot recover. (Art. 97)

2) Working Hours (Art. 98 &99)

   – 8 hrs. per day or 48 hrs. per week  (except managers, guards, intermittent  works by necessity, janitors, etc. Art. 108)

   – 6 hrs. during Ramadan

   – 7 hrs. hazardous, harmful jobs

   – 9 hrs. if worker does not work continuously

    – 10 hrs. exigency cases (Art. 106)

 3.         Rest Periods (Art. 101,102 & 103)

 -30 mins. each for rest, prayer and meals but total working hours shall not exceed 11 hrs.    (except those workers in Art. 108) 

 – not compensable, not under employer’s authority & not required at workplace.     

4.         Weekly Rest Days

            – Friday or any day of the week

            – not convertible to cash

            – full pay ( Art. 104)

            – may be consolidated up to 8 weeks in certain cases (Art. 105)

5.         Overtime (Art. 107)

            – hourly wage plus 50% of basic wage

            – if computed weekly, hours in excess thereof   shall be deemed overtime hours

            – works during holidays and Eids

6.         Vacation Leave (Art. 109)

            – 21 days annual leave

            – increase to 30 days after 5 yrs. in service

            – may not forego or receive cash in lieu

            – employer to notify worker at least 30 days 

            – worker may postpone leave to the following year with employer’s approval

            – employer may postpone leave for 90 days  but further postponement must be with  written consent of worker & shall not  exceed the end of the year following the  year the leave is due. ( Art. 110)

            – worker entitled to payment of accrued days of leave if unused and worker leaves the work. (Art. 111)

7. Other Leave With Pay:

            7.1       Eids leave– full pay(Art. 112)

            7.2       Childbirth leave- 1 day full-pay

            7.3       Marriage leave-         3 days

            7.4       Death leave (spouse, or one of ascendants & descendants)– 3 days (Art. 113)

            7.5       Hajj leave- 10 to 15 days (at least 2 yrs. in service, one time only) Art. 114

            7.6       Exam leave- actual no. of exam days 1^st time- fully paid leave / Repeat- unpaid leave (Art. 115)

8.         Sick leave – continuous or intermittent during a        single year & illness has been proven.

                        – 1^st 30 days- full-pay

                        – next 60 days- 75% of wage

                        – following 30 days- no pay (Art. 117)

9.         Open leave- without pay & by agreement of the worker and employer.

            – over 20 days contract deemed suspended unless otherwise agreed (Art. 116) 

10.  Work Injuries & Occupational Disease

Temporary Disability- full wage for 30 1^st days 75% for the entire duration of the treatment. Will be considered total disability after 1 yr. or medically determined that chances of  recovery are improbable or physically unfit to work. Contract shall be terminated & worker compensated accordingly (Art. 137)

            Permanent Disability or Death- entitled to three (3) years wages or SAR 54k whichever is higher. (Art. 138)

            *Previous employer also liable proportionately in pre-existing injury or illness (Art. 140)

*Employer not liable:

            – suicide or self inflicted injuries

            – caused by intentional misconduct

            – refuses to be examined by a physician or refuses to accept treatment by   company designated physician w/out valid reason. (Art. 139)

            11.       Medical & Social Benefits

                        – availability of first aid medicines

                        – provision of physician

                        – annual medical exam. Etc

12.  Other Benefits:

            (by law or by contract)           

            -Transportation (Art. 148)

            – Housing

            – board & lodging

            – percentage

            – commission

            – bonus

            – scholarship

            – travel, etc.

13.  Benefits Exclusive for Female Workers:

*   Night Work Prohibition (Art. 150)

* Maternity- 4 weeks before & 6 weeks after. – half wage for worker serving at least 1 year  will be paid half wage for reg. annual leave

– full wage for working at least 3 years. reg. annual leave will be without pay ( Art. 151 & 152)

– Medical care, nursery, etc. ( Art. 153, 159)

– 1 hour add’l rest period (Art. 154)

–  Disciplinary action suspended

–  Death of husband leave- 15 days (Art. 160)

Worker to pay:

* Loss, damage or destruction to employer’s properties through fault or violation of instruction (Art. 91)

* Cost of repatriation if unfit for work & if worker resigns without legitimate reason (Art. 40 p2)

* Pay monetary equivalent if notice requirement in termination cases is not complied (Art. 76)

* Pay indemnity in case of termination for an invalid reason (covers actual, potential material and moral damages ) Art. 77

Worker may not work for his own account  (Art. 39(2) in relation to Art. 233)

Employer:

– Right to discipline workers- (Art. 66)

– Penalty for repeated violations shall not  be harsher if committed after 180 days   from previous violation (Art. 68)

– No offense for not work-related acts committed outside the workplace (Art. 70)

– max. 5-day wage fine/month or suspension without pay may not exceed 5 days per month (Art. 70)

– Due process in disciplinary cases (Art. 71)

Assignment & Transfer

* Prerogative of the employer

* Worker’s work must be consistent with the work permit (Art. 38)

* May be assigned to other duties up to 30 days year (Art. 60)

* Right to allow transfer to other employer but must comply with legal requirements

* Worker’s new employer bear the fees in transfer of sponsorship (Art. 40 p. 3)

* Not allowed to employ workers of other employers nor allow worker to work for his own account (Art. 39 in relation to Art. 233)

Employer pays:

* Recruitment costs

* Iqama and Work Permit (including renewals & fines for delay)

* Change of profession

* Exit & re-entry visa

* Return ticket at the end of contract

* Repatriation costs of deceased worker & his personal belongings unless interred in the KSA or GOSI undertakes the same (Art. 40)

* TNT employers shoulder repat cost (Art.233)

• Others agreed upon in the work contract

 ** Sale, transfer & assignment of company

• New employer to give the same rights & privileges. Both employers are jointly and severally liable. The same applies in case of multiple employers (Art. 11)
• Old & present owner may agree that rights of workers be transferred to new owner with the written consent of the worker. Otherwise, worker may request for termination of contract & collect his dues from his employer (Art. 18)
• In case of bankruptcy or liquidation, amount due to worker is first rate privileged debts & worker paid an expedited 1 month wage prior to payment of any expenses (Art. 19) 

Work contract is deemed terminated in the following cases:

1)      Expiration of the term or period of contract and the worker express his intention not to renew it;

2)      Force majeure;

3)      Death of the worker;

4)      Death of employer in certain cases;

5)      When the workers attain the age of retirement;

6)      Total disability of worker to perform work; and

7)      Pre-termination of contract by either party.

Pre-termination includes the following:

* If both parties agree to terminate the contract, provided that the worker’s consent be in writing.

* Upon the request of one of the two parties in case of contract of unspecified term.

* Termination by the employer or worker for authorized causes;

* Resignation by worker;

*  Serious illness of worker resulting in long  absence from  work;

* Bankruptcy, dissolution and authorized shutdown of employer’s business, and other cases. (Arts. 74,77, 79 , 80, 81, 82 ).

VALID GROUNDS FOR TERMINATION BY EMPLOYER:

1.   Worker assaults the employer, manager-in-charge or any of his superiors;

2.   Failure to fulfill the essential obligations of the contract, or obey legitimate orders, or deliberately fails to observe employer’s legitimate instructions despite written warnings;

3.   Misconduct or act infringing on honesty or integrity;

4. Deliberately causes material loss, provided employer reports the incident to the authorities w/in 24 hrs. from discovery;

5. Worker resorts to forgery in order to obtain the job;

6. Worker is hired on probation;

7. Absence without valid reason for more than 20 days in 1 yr. or for more than 10 consecutive days subject to written warning by employer after 10 days of  absence in the first case and five days in the second case;

8. Unlawfully taking advantage of his position for personal gain;

9. Disclosures of work-related industrial or commercial secrets. (Art. 80 )

*Worker forfeits ESA & termination award

1.   Non-fulfillment of employer’s obligations;

2.   Employer resorts to fraud at the time of contracting with respect to the work conditions & circumstances;

3.   Employer assign the worker, without his consent, to perform work essentially different from the work agreed upon and contrary to the Art. 60 of SLL;

4.   Employer, a family member or the manager in-charge commits a violent assault or an immoral act against the worker or any of his family members;

5.   Employer’s treatment is characterized by cruelty, injustice or insult;

6.   Existence of serious hazard known to employer which threatens the safety or health of worker and failed to take necessary action;

7.   Employer or his representative through his actions & particularly his unjust treatment, or violation of the terms of the contract, has caused worker to appear as the party terminating the contract. (Art. 81)

*Worker is entitled to all his statutory rights

5.   Employer’s treatment is characterized by cruelty, injustice or insult;

6.   Existence of serious hazard known to employer which threatens the safety or health of worker and failed to take necessary action;

7.   Employer or his representative through his actions & particularly his unjust treatment, or violation of the terms of the contract, has caused worker to appear as the party terminating the contract. (Art. 81)

*Worker is entitled to all his statutory rights

END of Service Award:

1.   Finished Contract or Pre-Termination With Cause by Worker

      – ½ month wage for each of the first 5 yrs.

      – 1 month wage for each year after 5 yrs.

2.   By Resignation

– 1/3 month wage for each of first 5 yrs. provided worker in service for at least 2 yrs.

– 2/3 month wage after 5 yrs. to 10 yrs.

– 1 month wage after 10 yrs.

  * No Award for valid cause of termination by employer

  * basis of computation is the last wage

  * fraction of the year is to be computed proportionately

      EXAMPLE:

Length of Service            : 10 yrs. & 6 mos

Position                 : Mechanic

Basic Salary                     : SAR 1500

Allowances                       : SAR 500

_____________________________

Actual Wage ( LMAW ): SAR 2000 

( basis for the computation of the ESA )

FORMULA: ( FC ) 10 yrs. & 6 mos. LS                      

Example:

1st five year          : LMAW / 2 * LS = ESA                 

                                2000 / 2 = 1000 * 5 yrs. = 5000 ( ESA)

Above five years  : LMAW * LS = ESA                      

                                2000 * 5 yrs. = 10,000 ( ESA )

For fraction of the year:

ESA for one year / 12 * no of months                          

2000 / 12 * 6 =  1000

6 mos. 2000 / 12 = 166.66 * 6 = 1000

Total ESA for 10 yrs & 6 mos. 5000+10000+1000= SAR 16,000

Note:

Worker is also entitled for ESA for the fraction of month.

Formula:

ESA for one month / 30 * no. of days     

Example

15 days                                                                 

166.66 / 30 * 15 = ESA

5.55 * 15 = 83.33 ( ESA for 15 days )

FORMULA: ( PT / WOC ) by the worker ( Resignation )                 

                              3 stages                                  

1- 1st five year                  : LMAW / 2  / 3 * LS = ESA 

                                            2000 / 2 / 3 * 5 = 1666.66

                                            1000 / 3 = 333.33 * 5 = 1666.66 ( ESA)

2- Above five years                       : LMAW / 3*2* LS = ESA    

    & below ten years           2000 / 3 * 2 * 4yrs. = 5333.33 ( ESA )

      :                                     666.66 * 2 =1333.33 * 4 = 5333.33

3- Ten Yrs & above                       : LMAW * LS = ESA

                                            2000 * 1 = 2000 ( ESA)

For fraction of the year:

ESA for one year / 12 * no of months                 

2000 / 12 * 6 =  1000

6 mos. 2000 / 12 = 166.66 * 6 = 1000 ( ESA for 6 mos.)

Total ESA for 10 yrs & 6 mos. 1666.66+5333.33+2000 + 1000 = 10,000.00

REMEDIES:

Internal (within the company)

l  Personal

l  Written            (Art. 72, 91)

l  Arbitration/Grievance Machinery (Contract)

External (outside the company)

            PE POLO-OWWA (Sec. 23(b) RA 8042)

            Saudi Labor Office

            Primary Commission

            High Commission (Art. 210 to 228)

* Jurisdiction (Art. 214)

* Venue (Art. 220)

PRESCRIPTION OF ACTION:

INTERNAL (within the company)

* Offense– After 30 days from discovery (Art. 69)

* Penalty– After 30 days after investigation & establishment of worker’s guilt (Art. 69)

* Grievances- After 15 days (Art. 91p.2)

* Employer- from discovery of the occurrence

* Worker- from date of notification by employer

Decision- within 15 days from receipt (Art. 72)

Saudi Labor Office, PCSD & HCSD

* Claim of Rights under SLL & Work Contract- After 12 mos. following termination of the work relation. (Art. 222 p. 1)

* Violations of SLL or Regulations & Decisions issued thereunder- After 12 mos. following the date of occurrence of the violation. (Art. 222p.3)

IV. Post Employment

4.1  – Repatriation – Section 15 / 16

* Primary Responsibility – Section 15, Section 52 IRR

* No Fault Determination – Section 53 IRR

* Repatriation Procedure – Section 54 IRR

* Action on Non-Compliance – Section 55 IRR

* Emergency Repatriation – Section 56 IRR

* Mandatory Repat. Of Underage OFW – Sec.16, Sec.57 IRR

* Other Cases of Repatriation – Section 58 IRR

* ERF – Section 59 IRR

 4.2  – Prohibition on Bonds & Deposits – Section 60, IRR

V. Remedies

5.1   Administrative

– POEA, Section 28, IRR/  Illegal Recruitment – Section 14, IRR

5.2  Civil

 –  NLRC /    Section 10, R.A. 8042

 –  NCMB, Art. 260, 261 & 262, Labor Code

5.3  Criminal

–  Appropriate court/tribunal of receiving country (for crimes committed thereat)

 –  Regional Trial Court

–  Illegal Recruitment – Section 6 /  ULP – Art. 248 & 249, LC

6. OTHER LAWS AFFECTING OFWS

    6.1   Family Laws & Status (Applicability)

– Marriage (Effects of Nullity, Annulment and Legal    separation)

            Art. 26, 36, 37, 38, 45 & 55, Family Code

– Property Relations (Conjugal; Absolute Community,           

 Marriage Settlement by Separation of Property, Live-in Relationship (Art. 147) & Bigamous Marriages (Art. 148)

 – Obligation & Support ( Art. 194, 195, 196, 197, 198)

Necessities: Sustenance, Dwelling, Clothing, Medical  Attendance, Education & Transportation

 – Paternity & Filiation (Art. 164, 165, 167, 168 , 169)

 Children born during marriage are legitimate even if the       mother declares otherwise or guilty of adultery

–  Legitimacy must be impugn during (1, 2, 3yrs) R.A. 9262 – Anti

– Violence Against Women  & Their Children Act

Acts    : Physical, Psychological, Emotional, Sexual & Economic

           Protection:  BPO, TPO, PPO, etc.

Coverage:  married or not; living in or not; dating    relationship; common law and even lesbian relationship

 Employer    to send financial support direct to beneficiaries

 R.A. 9208 – Anti – Trafficking in Persons Act of 2003 (Transnational Crime)

Requisites:     

(1) Acts or Series of Acts

(2) Means Employed

(3) Exploitative Purpose

R.A. 7877 – Anti – Sexual Harassment

Committed by  mere utterance or even w/ consent    

R.A. 9225 – Citizenship Retention & Reacquisition Act  (“Dual Citizenship”)

– By taking oath of allegiance

– Usually availed of for convenience

R.A. 9189 – Overseas Absentee Voting Act

– Coverage:   18 yrs. up to vote for Pres, VP, Senators & Party List

– Registration: Period; Requirements; Appeals

-Voting:   Period; Personal or By Mail  (Canvassing & Appreciation of Ballots)

R.A. 9160 (as amended by R.A. 9194)

– Anti – Money Laundering Act (AMLA)

– Creation of Anti-Money Laundering Council  (AMLC)

            Ceiling:    P500k or equivalent in foreign currency

–           Suspicious transaction or series of transactions

–          covered even if less then P500k

Basis:       Underlying predicate crime (proceeds of illegal gambling: graft & corruption; frauds, etc.)     

Penalizes: Launderer; remittance facility (by participation, negligence or  failure to report); others who have  knowledge but failed to report & malicious reporting

Reverse Money Laundering (use for terrorism, etc.)

MARAMING SALAMAT PO!