Friday, December 26, 2014

Employee cannot work for a Competitor under Article 83 of Saudi Labor Law

Saudi Labor Law defines the rights of employees and employers. In any situation, it ensures that the no party gets an undue benefit of any situation. Saudi Labor Law has defined the rights of employees in several situations and we have explained them in different articles on this blog. The issue we are going to address today is the confidentiality of information and the right of the employer to stop employee to work in a competitive company. Yes, Saudi Labor Law allows an employer to stop the employee from working in a competitive company for a specified period. We have explained it below.

  1. If an employee is charged with such a responsibility that he gets in direct contact with employer’s customers or has access to employer’s business secrets, the employer has the right to require the employee to not to not to work in a competitive company and not to disclose his business secrets after the expiration of the contract.
  2. However, the above right of employer does not apply to employees automatically, it needs to be agreed between two parties in writing. If it has not been agreed between two parties, it is not applicable to the employee.
  3. The employer may require its employees to not to work for its competitors for any period not exceeding two years from the date of expiry of the contract subject to point 1 and 2 stated above.
  4. However, as per new Saudi Labor Law, as amended on 1/1/1437, the employer may require its employees to not to disclose his business secrets to anyone for if 10 years from the date of expiry of the contract. It means that the employee can work for competitor after two years of service, but he cannot disclose business secrets of the employer for 10 years (if provided in the contract and agreed upon by both parties)
  5. The employer has the right to sue the former employee if he breaches any term of the contract as provided above within 1 year of discovery of such violation.

Resignation /Termination under Saudi Labor Law
  1. End of Service Benefits (ESB) Calculation
  2. 4 kinds of Death Compensations of Workers in Saudi Arabia
  3. Can employer deduct Iqama Renewal Fee and Insurance cost at the time of Resignation?
  4. Compensation in case of Work Injury as per Saudi Labor Law
  5. Retirement Age in Saudi Arabia


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