Mass termination continues in private sector to cut costs

Private companies in the Kingdom continue mass retrenchment of Saudi workers ignoring directives of Labor and Social Development Ministry, Al-Hayat Arabic daily reported Tuesday.

The move comes just 28 days after Labor and Social Development Minister Dr. Ali Ghafees issued a directive banning mass retrenchment of Saudi employees by companies.

The ministry had warned that it would deny its services to violators of this directive. But there were reports of banks and other companies terminating services of many Saudi workers in recent days.

Major companies have terminated thousands of workers including Saudis from services citing economic downturn and heavy financial losses.

On Jan. 30, the ministry warned private firms against misusing Article 77 of the Labor Law, which came into effect on Oct. 1, 2015, and should not take it a reason to fire Saudi workers.

Meanwhile, Shoura Council member Dr. Saeed Al-Sheikh urged the ministry to revise Article 77, saying it serves the interests of employers than workers and disturbs the balance.

“The employee has become the weakest party in the work contract,” he added. “Article 77 allows private firms to terminate the services of workers by paying them 15 days’ salary for every year served in a company.”

Experts said Article 77 opened the door for private companies to terminate services of Saudi workers with reason or without any reason. They have urged the ministry to intervene to prevent its misuse.

They have called for an emergency meeting of concerned officials and departments to change the law.

Some experts, who spoke to Al-Hayat, urged private companies to be cautious while carrying out mass retrenchment of Saudi workers.

“Companies should provide Saudi workers necessary training to do their work efficiently instead of terminating them from services. On the other hand, Saudis should work sincerely and do their duties perfectly to win satisfaction of their employers,” one expert said.

Khaled Abalkhail, spokesman for the Labor and Social Development Ministry, commented on his Twitter account when a major company retrenched 1,200 Saudi workers: “The ministry has stopped its services and transactions to the company until an investigation into the incident is completed.”