Ministry’s punishment for dismissing Saudis to discourage recruitment

Businessman in Saudi Arabia have reportedly said a new system punishing distressed firms that dismiss Saudi staff is likely to discourage Saudisation efforts in the kingdom.

The new rules, confirmed at the end of last month, freeze recruitment at firms that fire more than 1 per cent of their Saudi workers unless they can prove to the government they have no other option.

Companies who fail to inform their local labour ministry office of a mass sacking two months prior to the action will have recruitment frozen for a period of time based on the percentage of Saudi staff dismissed.

Those that do provide the necessary documentation in time will receive a response in 45 days, which may ask them to replace foreign workers with Saudis or find new employment for the workers elsewhere.

Read: Saudi labour ministry to halt recruitment at firms that cut Saudi staff

Jeddah Chamber of Commerce and Industry member Abdulaziz Al-Sirai was quoted by Al-Madina newspaper as saying the rules would likely discourage the employment of Saudis.

“The ministry’s new decision will discourage private companies from employing Saudis in the first place as the process of dealing with Saudi employees seems more threatening than dealing with non-Saudi employees,” he said.

Al-Sirai suggested the ministry should have awarded firms for employing Saudis or those that had not fired any Saudi staff for a year rather than punishing those who dismissed them.

He also argued the ministry could have allowed the lowering of bonus and allowance requirements for Saudis.

“The decision will also hinder the pace of growth for the private sector. Some employers may fire Saudi employees one by one instead of many at one go,” Al-Sirai was quoted as saying.

Separately, technology investor Rashid Bin Zoumah said other methods like decreasing the required working hours of Saudis could have been considered.