Dubai: On Monday, Saudi Arabia has issued a ministerial decided that private sector companies could cut salaries by up to 40 percent, media reports quoted the daily Asharq Al-Awsat as saying. According to a daily newspaper, Asharq al-Awsat told, yesterday that Saudi Arabia’s Ministry of Human Resources and Social Development had agreed to change the state’s labor system. This would allow an employer to cut an employee’s salary by up to 40 percent for six months during the Covid-19 period.
The guidelines also allow for the possible termination of the agreement, taking into account the economic challenges in the aftermath of the Covid-19 expansion.
The new rules will also allow companies to remove contracts from employees 6 months after the coronavirus epidemic period .
“The new rules also include a provision that allows employers to continue to benefit from state subsidies in any form of private sectors, such as helping workers to pay wages from government fees, contracting for termination of employment, except for three conditions. The conditions of the force are met for consideration, “said Asharq al-Awsat said.
According to the ministerial decision, there are three conditions for terminating contracts as follows:
- Salary reductions, annual leave, and exceptional leave have all been used
- Six months have passed since the pay cut came into effect
- One company proved that many financial problems are facing in the vicinity of the outbreak.
The decision states that the workers will be paid if they are on annual leave within the stipulated six months.