Employment Relationship Upon Employee Conviction

Employment Relationship Upon Employee Conviction

The general principle is that the employment relationship remains in place and does not end once the worker is arrested or investigated by the competent authorities in a work-related criminal case. However, the Saudi regulator has put in place special provisions to address this situation, balancing the interests of the employer with the rights of the worker, and these can be detailed as follows:

Employer obligations during the worker’s suspension period:

According to Article 97 of the Labor Law, if a worker is arrested or detained by the competent authorities in cases related to or because of work, the employer is obligated to:

1. Continue to pay 50% of the worker’s wages: This obligation continues until his case is decided.
2. Maximum period: The employer is not required to pay this amount for a period exceeding one hundred and eighty days. If the suspension period exceeds this, the employer is not obligated to pay any part of the wage for the excess period.

Fate of deducted amounts:

• In the event of acquittal or dismissal of the investigation: If the worker is acquitted or the investigation is dismissed due to the lack of evidence of what was attributed to him, the employer must return to the worker what was previously deducted from his wages.
• In the event of conviction: If the worker is convicted, what was spent on him during the suspension period will not be recovered from him, unless the judicial ruling stipulates otherwise.

Can an employer fire an employee before a judgment is issued?

Yes, the employer can terminate the contract before a final court ruling is issued, but under specific and strict conditions. This is achieved by applying the provisions of Article 80 of the Labor Law, which allows the employer to terminate the contract without compensation, notice, or compensation. Cases that may apply to this incident include:

• If it is proven that the worker followed bad behavior, or committed an act that violated honor or honesty (paragraph 3).
• If the worker intentionally commits any act or omission intended to cause material loss to the employer (paragraph 4).
• If it is proven that the worker illegally exploited his job position to obtain personal results and gains (paragraph 8).

However, before applying Article (80), the employer must adhere to the following controls:

1. Providing the worker with the opportunity to defend himself: Article (80) explicitly stipulates that the contract may not be terminated pursuant to it except on the condition that “he is given the opportunity to express the reasons for his opposition to termination”. This means that an internal investigation into the worker is necessary.
2. Internal investigation procedures: According to Article 71 of the Labor Law, a disciplinary penalty (and dismissal is the most severe type of penalty) may not be imposed unless the worker is informed in writing of what has been attributed to him, interrogated, his defense investigated, and this is proven in a report.

Risks of dismissal before conviction: If the employer dismisses the worker based on Article (80) based on a mere accusation or arrest, and then a ruling is later issued acquitting the worker, this dismissal may be considered “dismissal for an unlawful reason” by the labor courts, which exposes the employer to paying compensation to the worker.

Differentiating between the public and private sectors:

It should be noted that a public employee is subject to the job discipline system, which stipulates in Article 19 that if an employee is referred for investigation or criminal trial, “administrative procedures shall be suspended… until the investigation or trial procedures are completed.” This principle does not apply directly to private sector workers subject to the labor system.

Conclusion:

The employer does not necessarily have to continue the contract until a final court ruling is issued, but he also cannot dismiss the worker simply by arresting or accusing him. The options available to the employer are:

The first (less dangerous) option: continue applying Article (97) of the Labor Law, pay 50% of the wage for a period of up to 180 days, and wait for the result of the criminal investigation. If the worker is convicted, the contract ends, and if he is acquitted, he returns to work and receives the rest of his wages.

The second (more serious) option: If the actions attributed to the worker constitute one of the cases stipulated in Article (80), the employer can – after conducting an internal investigation and enabling the worker to defend himself – terminate the contract. However, the employer bears the risk that the dismissal will be deemed unlawful if the worker is later proven innocent.

Therefore, the decision depends on the strength of the evidence the employer has against the worker and on his balance of the risks resulting from the early dismissal decision.

Continuation of the employment contract upon the worker’s conviction

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