Compensation for Unfair Dismissal in Saudi Arabia:

A Comparative Analysis with the UK and International Labour Standards of Protection

Muath Alqarni

 

Abstract: There is an inherent power imbalance between workers and employers, with employers typically holding greater bargaining power. This imbalance makes it difficult for workers to secure fair compensation in cases of unfair dismissal. While Saudi Labour Law has provisions protecting workers from unfair termination since 1996, its compensation framework is inadequate when compared to International Labour Organisation (ILO) termination standards (1982) and the United Kingdom’s (UK) unfair dismissal law. The research gap is that, to the best of the author’s knowledge, there have been limited studies that critically assess whether compensation provides adequate protection to all workers under Saudi Labour Law. This paper critically examines the adequacy of the approach to compensation standards available to workers in the Kingdom of Saudi Arabia (KSA) following unfair dismissal, highlighting key deficiencies in existing legal provisions. It compares Saudi law with international labour conventions and UK unfair dismissal compensation structures, which may offer better financial redress. The UK model may offer valuable insights for reforming Saudi Arabia’s Labour Law. By comparing these frameworks, this paper aims to contribute to the development of fairer compensation standards for unfair dismissal cases. The findings of this study demonstrate that the current statutory formula for compensating arbitrarily dismissed workers under Saudi Labour Law is inadequate. This paper proposes a more effective approach that, if adopted, would provide enhanced protection for all workers, affording them the right to seek adequate compensation.