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January 02, 2024 - BY Mohamed Abdulaziz

Protecting workers' rights in the event of bankruptcy: From the Saudi Labor System

Article Nineteen of the Saudi Labor System is designed to regulate issues related to the amounts due to the worker or their heirs. This text states that the due amounts to be paid to the worker or their heirs are considered first-class privileged debts. The worker and their heirs are granted a privilege over all the employer's assets to ensure their collection.


Text of Article Nineteen of the Saudi Labor System:

The amounts due to the worker or their heirs under this system are considered first-class privileged debts. The worker and their heirs have a privilege over all the employer's assets for their collection. In the event of the employer's bankruptcy or the liquidation of their establishment, the said amounts are registered as privileged debts, and the worker is paid an accelerated amount equivalent to one month's wage, before paying any other expenses, including judicial expenses and the expenses of bankruptcy or liquidation.


The importance of this legislation is evident in safeguarding the rights of workers and their heirs in the event of bankruptcy or liquidation of the workplace. This enhances the stability of the employment system and achieves a balance between the rights of workers and the interests of employers under exceptional circumstances such as bankruptcy.

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