In a significant legal development strengthening workers' rights in Saudi Arabia, the Labor Court of Appeal upheld a lower court ruling affirming a worker's right to leave their job immediately and without prior notice if their employer fails to pay their wages. This final ruling is based on Article 81 of the Saudi Labor Law, which grants workers the right to terminate their contracts while retaining all their legal rights if their employer breaches their fundamental obligations, most importantly, paying wages on time.
General context and labor sector reforms
This ruling comes within the context of broad reforms underway in the Kingdom's labor sector, in line with the objectives of Vision 2030, which aims to create an attractive, safe, and equitable work environment for both employees and employers. Recent years have witnessed significant legislative and judicial developments, including the establishment of specialized labor courts in 2018 to expedite the resolution of labor disputes with high efficiency. This decision also aligns with the objectives of the "Wage Protection Program" launched by the Ministry of Human Resources and Social Development to ensure the timely payment of salaries through an electronic monitoring system, thus underscoring the state's commitment to protecting the fundamental element of the contractual relationship: wages.
Details of the ruling and its legal significance
The court explained in its ruling that the establishment's admission of delaying part of the salary payment constitutes conclusive evidence of its breach of a fundamental obligation, thus justifying the employee's unilateral termination of the contract. The ruling established a legal principle that the obligation to pay wages on time is not a mere obligation, but rather a "fundamental obligation" that cannot tolerate negligence or unjustified delay. Accordingly, the Court of Appeal rejected the employer's appeal, upholding the validity of the initial ruling and its conformity with applicable regulations, thereby closing the case with a clear victory for workers' rights.
Expected impact on the labor market
This ruling is expected to have a positive and tangible impact on the Saudi labor market. Domestically, the decision serves as a strong deterrent to establishments that might delay or neglect paying their employees' wages, thus enhancing job security and financial stability for workers. It also raises workers' legal awareness of their rights under the law. Internationally, such rulings bolster the Kingdom's reputation as a reliable workplace that respects contracts and protects the rights of workers, both citizens and residents, contributing to attracting global talent and expertise to support the country's economic development.
