Final ruling: Delayed salaries negate the notice requirement and permit leaving employment

The Labor Court of Appeal in Saudi Arabia issued a final ruling that represents a new victory for employee rights, as it upheld an initial ruling that recognizes the worker’s right to leave work immediately and without the need to provide prior notice or adhere to the warning period, in the event that the establishment is late in paying his financial dues on their specified dates.

Details of the ruling and legal basis

The court ruling was based primarily on Article 81 of the Saudi Labor Law, which serves as a lifeline for employees in cases where employers fail to meet their fundamental obligations. The court considered the monthly wage to be the cornerstone of the contractual relationship between the two parties, and that any breach of this wage entitles the employee to unilaterally terminate the contract while retaining all their legal rights, including end-of-service benefits, without any compensation due to the employer for the employee's sudden departure.

The details of the case and the establishment's admission

During the hearings, the court considered the company's admission of delayed payment of part of the wages as conclusive and irrefutable evidence of its breach of contractual obligations. The court established a crucial principle: that the timely payment of wages is a fundamental obligation that cannot be disregarded, and that any unjustified delay forfeits the employer's right to claim the notice period (which typically ranges from 30 to 60 days), thus rendering the employee's decision to leave legitimate and in accordance with regulations.

Regulatory context and wage protection in the Kingdom

This ruling aligns with the extensive reforms underway in the Saudi labor market as part of the Kingdom's Vision 2030, which aims to enhance the attractiveness of the work environment and safeguard the rights of all parties. The Ministry of Human Resources and Social Development is working diligently through the Wage Protection Program to monitor salary payments and ensure that establishments adhere to timely and accurate payment schedules. This judicial ruling reinforces these regulatory efforts, transforming the protection from a mere administrative procedure into a binding legal precedent.

The importance of governance and its impact on the labor market

This ruling is of paramount importance on both legal and economic levels, as it serves as a strong deterrent to establishments that delay paying their employees' dues. The ruling affirms that the employment relationship is not one of submission, but rather one based on mutual obligations, and that any failure to pay wages immediately releases the employee from the constraints of the contract. This judicial precedent is expected to encourage companies to prioritize the timely payment of salaries to avoid losing skilled personnel and facing legal repercussions, thereby enhancing job stability and financial security for private sector employees.

At the conclusion of the litigation, the Court of Appeal rejected the employer’s attempts to overturn the ruling, and decided to accept the objection in form but reject it in substance, thus closing the case file by confirming the soundness of the initial ruling and its complete conformity with the applicable regulations in the Kingdom.