Problems relating to Trade and Investment on Saudi Arabia
16. Employment |
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Issue |
Issue details |
Requests |
Reference |
| (1) Tightened Saudi Nationals Employment Regulation and Abrupt Changes | - GOSA implements the national policy of to encourage employment of Saudi nationals in the private sector in a certain ratio "Saudization". In many cases migrant foreign workers from India, etc. are assigned to operate factories. It causes operational problems. - Changes are made sometimes in rules and regulations on Saudization, which is of vital importance to foreign funded enterprises, suddenly without any prior notice, to the great inconveniences and confusions of private enterprises. Moreover, the fact remains that the clerical workers at the Ministries and agencies are unable to catch up with these changes. - As of now, SGA's guidelines on Saudization are being established under the more realistic conditions for foreign funded enterprises, although there remains at all times an anxiety that the guidelines are established in the direction difficult for FFEs to satisfy the requirement, without sufficient explanation given to FFEs. - Ministry of labour and Social Development (MLSD) compels foreign funded enterprises' employment of Saudi nationals at certain ratio, corresponding to industry sector and its size (Saudization). Since year before last, MLSD has accelerated tightening of Saudization. While raising the Saudization rate, MLSD includes in the denominator foreign despatched workers, etc. While importance of Saudization is well appreciated, the state of affairs at the labour market does not catch up with the governmental policy, inviting labour shortage as a result, giving vent to delays in construction work, shortage of house maids, etc. - Compared to foreign workers, wages of Saudi workers are high, while they tend to decline working overtime, night shift, job relocation, etc. All these compensations add up to cost increase from promoting Saudization. These could drive enterprises promoting Saudization squarely with a positive stance into losing their competitive edge in price. |
- It is requested that GOSA provides an ample grace period in implementing these changes. - It is requested that SGA maintains the current realistic guidelines that enable FFEs' satisfaction of Saudization by their respective own self-efforts. - It is requested that MLSD: -- promotes Saudization matching with the actual state of affairs of the labour market. -- relaxes the speed of strengthening the Saudization. - It is requested that MLSD enhances incentive measures for enterprises promoting positively Saudization. |
- Labour Law - Customar - Nitaqat Saudization Programme |
| (Action) - New Labour Law, Royal Decree No. M/51 23 Sha'ban 1426 (approved by the Cabinet on 27 September 2005), has advanced the Saudization (Saudi nationals), restricting employment of certain categories of business and job types only to Saudis. - New Labour Law (enforced in 2006, under Article 26 (2)) provides "The percentage of Saudi workers employed by the employer shall not be less than 75% of the total number of his workers". Ministry of Labour in December 2008 announced its decision to reduce to 30%, the percentage of Saudi workers employed in private enterprises. The percentage of Saudi workers in the range of 5%-20% will apply on a case-by-case basis to business sectors with relatively few Saudi workers in the past, such as manufacturing, construction, agriculture, and cleaning. If the number of Saudi workers appreciably or continually decreases below the standard, GOSA will take measures against such enterprise, for example, by withdrawing the grant of alien visa issuance/renewal applications, and prohibiting participation in the public tender. |
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| (2) Visa issuance is Complex and Delayed | - Expatriates' business activity gets restricted for two-weeks pending visa issuance at Saudi Arabia Embassy in Egypt (SAEE). During this time, SAEE requires deposit of the original passport. - It takes much time for filing visa application and get it issued, nearly a month. Persons without visa are unable to go on business trip at short notice. As a Manufacturing depot Saudi Arabia could be a difficult location to send quickly staff for trouble shooting, etc. - It takes 2-3 weeks to get entry visa issued. It is impossible to cope with the work, demanding immediate entry. |
- It is requested that SAEE expedites the visa issuance. - It is requested that GOSA (continues) to deregulate restrictions to enable emergency despatch of personnel for troubleshooting purposes. - It is requested that MLSD takes step to work toward streamlining the entry visa issuance procedures. |
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| (3) Difficulty in Acquisition of Work Visa | - It takes several months from the date of filing application to acquisition of work visa, without disclosure of the reason for the delays. The whole process is veiled in gray. | - It is requested that GOSA: -- expedites the visa issuance, -- provides a expedited processing, especially to enterprises having achieved 30% or more Saudization. |
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| (4) Inefficient Immigration Procedures | - It is common to see alien residents in Saudi (Japanese and other aliens, not on business trip), having to wait in queue for one or two-hours at the immigration. Recently, Japanese on business trip had to wait actually for more than 4-hours in queue. There is no sign of improvement on the complaint filed with GOSA via the Japanese Embassy in Saudi. Immigration personnel's' behaviours are outrageous, fighting for the rubber stamp, etc. with their colleagues. They would abruptly leave the post, and would not get back for a long-time. Especially striking delays take place in Damman airport. | - It is requested that GOSA: -- increases the number of immigration wickets to the maximum extent possible, -- motivates immigration personnel to maximise efficiency in all sincerity, and -- executes prioritised immigration process for foreign businesspersons. |
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| (5) Difficulty in Securing Quality Saudi Workers | - It is requested that difficult to employ quality Saudi workers who demand double wage payment compared to non-Saudi workers. Incentive measures should be provided for enterprises with more than 30% of Saudi employees, such as deregulating employment of non-Saudis. | - It is requested that GOJ contributes to fostering Saudi human resources through provision of education and vocational training of Saudi nationals for the development of economic and industrial cooperation between Saudi Arabia and Japan. | - Labour Law. Article 26 - Nitaqat, Saudi Arabia's Indigenisation Programme |
| (Action) - Amended Labour Law, focused on workers' protection was promulgated and released in Gazette and MLSD website dated 24 April 2015. Its implementation is aimed at starting day of 21 October 2015, and facilitating implementation of the Nitaqat program. |
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| (6) Restrictions on Employment of Female Workers | - In employment of female workers, rules and restrictions are abundant, including without limitation, female exclusive work room, musallah (place of worship), kitchen, water closet, etc., which hinders employment of female workers with positive stance. | - It is requested that MLSD deregulates restrictions on issues and things not prerequisite under religion. In real life, at public places, male and female coexist. Too stringent segregation between male and female at office ? isn't it simply going too far? | - Labor Law - Municipality Regulations |
| (7) Rough Handling of Passports | - Passports get a poor, rough handling at SAEE. They get labels sealed here and there, both on the front and back of the covers, regardless, with plenty of staplers. | - It is requested that SAEE instructs its employees for a more careful handling of Passports. | |
| (8) Restricted Women's Entry | - Due to restricted women's entry, it is difficult to despatch women cosmetic sales specialist to Saudi Arabia. | - It is requested that GSA repeals restrictions on women's entry into Saudi Arabia. | |
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