This article was originally published for Lexis Middle East HR Alert.
Amane Mohammed of Al Tamimi & Company looks at legal and practical requirements when off-boarding employees in the UAE and Saudi.
In the UAE, an employer who sponsors a foreign national’s residence visa and/or work permit has direct responsibility for cancelling these on the termination of employment. Employers must file the relevant cancellation applications with the competent immigration authorities within the prescribed statutory timeframe, and failure to do so can result in fines and/or potential restrictions on future visa applications. Following cancellation, the employee is typically provided a limited grace period during which they must either secure new employment and transfer their sponsorship to a subsequent employer or depart the country.
In Saudi the sponsorship framework has historically tied a foreign worker’s legal residency status almost entirely to their employer. Recent Labour Reforms under the Labour Reform Initiative have enhanced mobility rights of certain categories of expatriate workers, but employers retain primary responsibility for ensuring visas are processed correctly and in a timely way. The distinction between a final exit visa, which terminates the employee’s right to reside in Saudi and a transfer of sponsorship to a new employer is of importance. Procedural missteps can leave employers exposed to regulatory sanctions and put the employee in an irregular immigration status.
Both jurisdictions also impose statutory end-of-service gratuity obligations which must be accurately calculated and fully settled as an integral component of the off-boarding process.
In the UAE, the end-of-service gratuity entitlement is determined by the employee’s length of service. Employers must also account for any accrued but untaken annual leave, repatriation costs, notice period entitlements and any contractual entitlements, which must be paid in 14 days from the termination date.
In Saudi, the end-of-service award is similarly based on an employee’s years of service and their termination circumstances (whether employer-initiated or a voluntary resignation). The employer is also responsible for the cost of repatriating the employee to their country of origin, unless they elect to remain in Saudi under a new sponsorship arrangement with a new sponsoring employer. Outstanding leave entitlements and, where applicable, notice period and contractual obligations must also be incorporated into the final settlement and payment of these must be within a prescribed time from the termination date.
In both jurisdictions, timely and complete discharge of all financial obligations is required. Disputes on unpaid or incorrectly calculated final settlements often trigger complaints to labour authorities, which may delay visa cancellation proceedings and materially complicate the exit process.
The sequencing and coordination of multiple parallel workstreams is a major practical issue when off-boarding foreign nationals. Notice of termination or non-renewal must be provided in line with the applicable contractual and statutory requirements, including, in the case of Saudi, processing through the Qiwa platform in order for termination to be legally effective.
In addition to managing the employee’s own visa cancellation or transfer, a departing employee may have dependants whose residence visas are linked to their sponsorship status, which requires simultaneous processing of family visa cancellations.
Employers must also consider the implications of any pending or prospective employment disputes. If an employee files a labour complaint or refers a matter to a competent tribunal, this may necessitate a hold on visa cancellation proceedings, leaving the employer in a state of continued and potentially protracted sponsorship liability.
Operationally, off-boarding foreign nationals requires close and structured collaboration among HR, legal, finance, and government relations functions. Detailed workflow protocols that map each stage of the process, assign clear ownership, and incorporate adequate lead times for regulatory processing are essential in order to ensure there is a seamless and compliant exit.
Key Contact
Amane Mohammed, Associate, amane.mohammed@tamimi.com