Saudi Arabia’s Ministry of Labour and Social Development will punish firms by freezing their ability to recruit new workers if they are involved in the mass sacking of Saudis.
A new directive issued by labour and social development minister Ali Al-Ghafis allows only companies in a dire financial state or on the verge of closure to be exempted from the penalties, according to Saudi Gazette.
However, in order to avoid the recruitment freeze companies will need to inform their local labour office and provide approved justification two months before the date of enforcing it.
The move comes following accusations that some companies were using current economic difficulties in the kingdom to cut Saudi staff, who often demand a higher salary than foreign workers.
Saudi Gazette cited ministry spokesperson Khaled Abal Khail as saying the directive would be applied to all large and medium companies.
A mass sacking will be considered the dismissal of 1 per cent of Saudi employees or 10 Saudi employees.
Firms that fail to inform the labour ministry of mass cuts to their Saudi workforce two months prior to the action will be unable to obtain visas or transfer sponsorship to recruit new workers.
If a company dismisses 5 per cent of its Saudi workforce it will be unable to obtain visas for new workers or transfer sponsorship for 90 days, increasing to 180 days for between 5 and 10 per cent of Saudi staff.
Further measures will see the halting of visa services for 360 days for the sacking of 10 to 15 per cent of the Saudi workforce, 540 days or 15 to 20 per cent and 720 days for more than 20 per cent.
To avoid these measures companies must submit documents to the labour office two months before the sacking showing their financial position, justification for the sackings and the names of the Saudis being dismissed with reasons for the cutting of each worker.
They will also need to provide details of non-Saudis working at the firm in similar job roles and measures taken to avoid the job cuts.
The labour office will then review the documents and provide a response within 45 days.
This could include the recommendation that the company replace foreign workers with Saudis to avoid the dismissals or find alternative employment for the Saudis in another department or another firm belonging to the employer.