Law & You - 2010 No. 14

What is the law pertaining to a Saudi who works for a company while working in secret to start his own business with the aim of taking the customers from his current employer before resigning? — I.K.H.

Here are your answers:

It is not allowed for either a Saudi or an expatriate to do business that is different from what is stated on the Commercial Register.

What you describe is a crime, whether the offender is a Saudi or an expatriate.

By the way: Expatriates are free to start their own businesses in the KSA under the rules of the Foreign Investment Law. You can learn everything about the regulations here: http://sagia.gov.sa.

I have been working in the Kingdom with family status under a two-year contract. My first year ends this month. But out of the blue I received a termination notice, claiming they are re-structuring in a way that makes my position redundant. My record is impeccable. I have not received so much as a verbal rebuke from my employer. During my tenure so far I have had to relocate to another city. This required me to change residence, change schools for my children, etc. Now all of a sudden I am being terminated. What are my rights in this situation?  — S.H.

Your company is in breach of contract and the reason for termination is not a legitimate reason. Your contract can only be canceled if you have committed a grave mistake, as described in Article 80 of the Labor Law.

You are entitled to the following:

• Pay through the end of your two-year-contract;

• All rights outlined in your contract;

• Two years worth of paid vacation, paid in time off or in financial compensation; and

• Your End-of-Service Benefit (ESB).

You may complain to the Labor Office who will call the manager of your company to question him and advise him of what the law stipulates. Do not resign if the situation leads to a labor dispute; your employer is required to pay you during the litigation process.

I have been working at a private company since 2003. The contract I signed was for three years. I have not signed a contract since. Now after seven years I am going to resign from the company and I am expecting a final exit.

My basic salary is SR3,000 and I receive 25% on top of that for housing. My company pays SR1,200 in an annual insurance premium.

My question pertains to calculating my ESB. Also: Can the company refuse my resignation on any particular grounds? My iqama expires in September. — M.A.

Your end of service is September 2010. You might jeopardize your benefits package if you resign before that date. I advise you to render a notice to your company that you intend to stop your work at the exact date in September. Your employer might agree to allow you to resign earlier without penalty, but that is your employer's prerogative. Also, keep in mind that since you have worked for more than five years you can ask for amendments to your contract, including asking for better conditions that would be offered elsewhere for your type of work. If they try to stop you from working elsewhere you may complain to the Labor Law. Do all of this while on the job rather than after you leave the job.

— Answers given by  Muhammad Jaber Nader

— Questions may be sent to Arab News by e-mail (arabnews@arabnews.com), fax (02)2836228, or regular mail (P.O. Box 10452, Jeddah 21433).