A court ruling reinforces the principle of primacy for written agreements
In a landmark ruling, the Saudi Court of Appeal brought to a close a complex labor dispute, upholding a lower court's decision to dismiss a compensation claim filed by an employee against her employer. The court established a significant legal principle affirming that prior written agreements, even those made via email, take precedence over subsequent documentation on digital platforms such as Qiwa. The ruling was based on the well-established legal maxim, "He who seeks to undo what he himself has done is himself invalidated," clarifying that documenting the termination of the contract through Qiwa, pursuant to Article 77, does not negate the effect of the parties' prior agreement to terminate by mutual consent.
Background of the dispute: between Article 77 and Article 74
The case began when the employee (the plaintiff) sought financial compensation, arguing that the company had unlawfully terminated her employment through the “Qiwa” platform, in accordance with Article (77) of the Saudi Labor Law, which grants employees compensation if termination is for an unlawful reason. In response, the company (the defendant) presented conclusive evidence, consisting of email correspondence, proving that the employee had initiated the request to terminate her contractual relationship, and that the company had accepted her request and converted it into a resignation based on her explicit written consent. When confronted with this correspondence, the plaintiff's lawyer admitted its authenticity, significantly weakening the case.
General context: Digital transformation in the Saudi labor market
This ruling comes at a time when the Saudi labor market is undergoing a massive digital transformation as part of the Vision 2030 goals. The “Qiwa” platform, launched by the Ministry of Human Resources and Social Development, is a cornerstone of this transformation, aiming to streamline and automate all work procedures, from contract documentation to managing termination processes. While these platforms are important in enhancing transparency and efficiency, this dispute has highlighted the relationship between digital procedures and the legal reality of agreements between parties. The court clarified that these platforms are tools for documentation and implementation, and that the essence of the contractual relationship and the genuine intent of the parties are the fundamental principles that must be upheld.
The importance of the ruling and its expected impact
This ruling carries significant weight both locally and regionally. Locally, it establishes a legal precedent clarifying to employers and employees that the essence of contract termination lies in the actual circumstances and mutual consent, not merely in the technical procedures followed. It affirms that a written agreement by mutual consent, as stipulated in Article (74) of the Labor Law, is paramount. This strengthens the stability of contractual relationships and reduces attempts to exploit digital procedures to evade prior agreements. Regionally and internationally, the ruling sends a reassuring message to investors and foreign companies operating in the Kingdom, demonstrating that the Saudi judiciary possesses the necessary maturity to handle emerging issues arising from digital transformation and that it balances technical procedures with established legal principles, thereby enhancing the attractiveness of the Kingdom's investment environment.
Conclusion: The initial ruling is upheld
Based on the foregoing, the Labor Court concluded that the contractual relationship had ended by mutual agreement, and that the plaintiff's pursuit of compensation contradicted her prior written consent to resign. After a thorough review of all documents and arguments, the Court of Appeal upheld the initial ruling, affirming the soundness of its reasoning and operative part. The ruling thus became final and enforceable, bringing to a close a case that will serve as an important precedent in future labor disputes.
