A federal court forces Saudi Arabia to compensate an employee with 330,000 dollars

The Federal Court in Geneva obligated the Saudi regime to pay $300,000 in compensation to a former employee following the illegal termination of his services.

The employee, who worked as a UN delegate, was fired from Saudi Arabia in 2017 after 40 years of work.

According to the Federal Court in Geneva, Saudi Arabia paid the aggrieved person about $11,000 in end-of-service compensation.

It stated that the termination of service does not comply with the agreements contained in the employment contract, especially the latest amendment in 2009.

The contract stipulates that the employee is entitled to one month’s wages for each year of work, and if he reaches retirement age, he receives two additional monthly salaries.

Saudi Arabia denied that it had signed such a contract after the dismissed employee filed a lawsuit against Geneva. Still, the employee could not show the 2009 contract because he did not receive a copy of it.

The Geneva lower courts concluded that both sides signed the same, and the Federal Supreme Court took this view.

Among other things, Saudi Arabia argued before the Lausanne judges that the $330,000 severance pay would be excessive and considered the “excellent salary” of $8,200 the employee was receiving each month.

The Federal Court stated that the employee had not contributed to the occupational pension system for 40 years.

Business Standard agency said that the Saudis would work for a more extended period and pay more to the famous pension fund in Saudi Arabia.

The agency attributed this to the government trying to bridge its financial deficit of $213 billion. It indicated that Saudi Arabia would try to deduct from the salaries of employees in the Kingdom.

Saudi media revealed that a decision was issued allowing companies to reduce salaries in the private sector in the Kingdom to 40%.

It stated that the possibility of terminating employee contracts sparked a wave of controversy and outrage on social media.

The Saudi newspaper, Asharq Al-Awsat, said: “This decision allows the employer to terminate employee contracts after six months of the compelling circumstance we are living in.”

It indicated that these decisions come within the framework of what is facing the Saudi labour market due to the continuation of the closure procedures to combat the Corona epidemic.

Some major companies in the Kingdom started implementing this decision, according to what was revealed from emails sent to employees of companies such as Almarai and Nesma.

Saudi activists deplored the decision that targeted the employees and noted that the priority in reducing salaries should be from ministers and senior officials and not from the “poor” employees, as they described them.

Saudis criticized prominent official news accounts in the Kingdom for ignoring the decision, which they said constituted an apparent injustice against private-sector employees.

Some major companies and well-known brands have begun to reduce the salaries of their Saudi employees by about 40%, and these were based on Article 41 of the Labor Law, and the state bears the remaining 60%.


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