Companies can Reduce Salaries or Grant Leaves

Companies May Reduce Salary or Grant Leave due to COVID-19

Ministry of Human Resource & Social development has issued a decision related to contractual relationship between workers & employers. Ministry has given an option to Companies (Employers) that they can either reduce Salaries of the people working under it or Can grant leaves to the employee which will be counted from his/ her annual leave balance due to COVID-19 impact

Companies May Reduce Salary or Grant Leave due to COVID-19

Employers can Reduce Salaries or Grant Leaves

Here are the important points of the decision taken by the Ministry:

  • Employer and Employee must come to an agreement before taking any decision of reducing Salary or reducing working hours or providing any leave.
  • If local leave is granted (which means the employee has to in Saudi Arabia only) to the employee. Then these leaves will be deducted from his or her annual leave balance as per Article 116 of Saudi Labor Law
  • Employee has the right to terminate the contract. But the contract will be considered as illegal if the employer is wrongly claiming the benefits from the state to deal with the situation.
  • Ministry of Labor and Social development has launched a portal called AJEER portal to provides services which organize the temporary employment of expatriates and covering the needs of the market and making use of the workforce present in the Kingdom instead of recruitment.
  • More details can be found here (
  • This portal will help the employers to publish the names of excess expatriates or workers in their company.

By this decision, the ministry aims to protect workers during such circumstances from being terminated or losing their contractual benefits. The portal will soon offer the businesses to publish names of their excess workers.

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