As discussed in Chapter 1, arbitration as a means of resolving labour disputes in the KSA has had a historical and practical basis in communities in some regions of the KSA before the enactment of the labour laws. Despite the simplicity of the arbitration proceedings, as well as the absence of legal regulation, customary arbitration was effective in resolving labour disputes during the period under consideration.
2.4.1 The First Legislation Authorizing Labour Arbitration in the KSA, issued in 1947 Since the early days of issuing legislation and labour laws, the KSA has not overlooked the role of labour arbitration as an alternative means of settling labour disputes. Thus, the second labour legislation in the KSA, the Labour and Workers Law issued in 1947145, contained the first legislative text to authorize arbitration as a means of settling labour disputes in the KSA146. Article 38stated:
The worker and the employer are entitled to request arbitration if they had a dispute. This is done by submitting a request to the government. Arbitration is undertaken by two persons, one appointed by the employer and another by the government. If the two members did not agree on an award, the Ministry of Finance appoints a third one to settle the dispute. 147
From the above article, the rules and procedures of labour arbitration according to the Labour and Workers Law of 1947 may be summarized as follows.
Firstly, the previous law granted parties to the labour relationship the right to choose the arbitration method to settle labour disputes, but it did not state that both parties, employer and worker, needed to agree to arbitration, whether by including an arbitration provision in the labour contract or by common agreement after the emergence of the labour dispute.
Secondly, the party desiring arbitration submitted a request to the government, including his wish to settle the dispute by arbitration. He also needed to name the disputed issue. Arbitration is a process undertaken by two persons, one appointed by the employer, and another by the government.
Finally, if the two arbitrators did not agree on an award, then the Minister of Finance appointed a third arbitrator to settle the dispute. Hence, the arbitration award is issued by a majority decision.
These are the most significant procedures of labour arbitration according to the Labour and Workers Law of 1947, although they did not address many important details pertaining to the arbitration process. Although only one article in the above law addressed labour organization, for the first time the principle of labour arbitration in the KSA was endorsed.148
145Saudi Labour and Workers Law of 1947, above n 23. 146Al-Dareeb, above n 71, 463.
147Saudi Labour and Workers Law of 1947, above n 23, art 38. 148
Muhammad Al-Zoheely, Judicial Organizing in Kingdom of Saudi Arabia (King Abdul-Aziz Foundation for Researches and Archives, 1999) 2; Al-Nafea, above 19, 4-5.
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2.4.2 The Second Legislation of Labour Arbitration in the KSA according to the Labour and Workers law of 1969
When the third Saudi Labour and Workers Law of 1969 149 was issued, it included, according to Article 210150, an explicit clause cancelling all the articles of the previous law issued in1947, including Article 38 which stated the rules of labour arbitration according to this repealed law.151
As previously mentioned in this chapter, the third Saudi Labour and Workers Law of 1996, was characterized by its comprehensiveness regarding the organization of labour relationships in the KSA. This included procedures for labour arbitration organization in Articles 183-184.152 The procedures of labour arbitration according to this law are now summarized.
Article 183/1states:
In all cases, the parties to a dispute may by mutual agreement appoint one arbitrator for both of them, or one or more arbitrators for each party so that the arbitrator or arbitrators may settle the dispute in lieu of Committees provided for in this Chapter. 153
From the above article, it can be seen that arbitration in the KSA is optional, providing that arbitration as a means of settling a dispute, is agreed to by both parties, instead of referring them to the Labour and Settlement of Disputes Committees, as the authority has jurisdiction over labour disputes under Saudi Labour and Workers Law of 1969.154
The parties‟ agreement to resort to arbitration in the event of a dispute is shown in two ways. Firstly, the labour contract has a clause in it called the „arbitration clause‟ that states that arbitration is the preferred means for settling any labour dispute concerning the execution, interpretation, or termination of the contract.155 Secondly, agreement on arbitration takes place subsequent to the dispute. This is called the „arbitration agreement‟.156
Also, according to the previous article, the Saudi Labour and Workers Law gave the parties the right to select the arbitrator(s), whether by selecting one for both or more than one for each party. When there are numerous arbitrators, they should be odd in number so that the dispute may be settled by a majority should a split decision occur. The umpire is selected by mutual agreement and the arbitrators' names are written down in the arbitration deed. If the
149Saudi Labour and Workers Law of 1969, above n 35. 150Ibid art 10.
151
Abdelmegeed, above n 39, 217.
152 Saudi Labour and Workers Law of 1969, above n 35, art 184,183. 153Ibid art 183/1.
154Muhammad Omran, The Mediator for Explaining Labour and Worker Saudi Law (Al-Nahda Al-Arabia, 1995) 29.
155
Atef Fakhry, Alphabetic Guide for Explaining the Saudi Labour Law (Tohama Press, 1982) 87. 156Ibid.
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umpire is not agreed upon, the primary Committee chairman must select him according to Article 183/2.
Where the arbitrators fail to select an umpire, the chairman of the primary Committee in whose circumscription the place of work is located shall appoint the said umpire, if such an umpire has not already been appointed in the arbitration agreement.157
The rules of the 1969 Law did not make any provision for arbitrators, so Shari'ah was the source for such provisions. After the issuance of the Saudi Arbitration Law in 1983, it became the reference point for the provision of arbitrators.158
The law bound arbitration parties to submit the arbitration deed to the relevant authority, namely the Primary Committee, according to the text of Article 183/5.
A copy of the arbitration agreement shall be deposited with the office of the appropriate Primary committee in the area. 159
The previous Labour and Workers Law determined the basic information to be included in the arbitration deed, the arbitration period, and the principles to be followed for settling the disputed issue according to Article183/3:
The arbitration agreement shall indicate the time-limits and the rules of procedure to be followed in order to settle the dispute. 160
The arbitration decision, according to Article 183/ 4 stated that:
The arbitrators' award shall be of first instance and appealable before the High committee within the time-limits, time-extensions and the rules of procedure prescribed for the appeal of awards before the said Committee, unless the arbitration agreement expressly provides that the arbitrators' award shall be definitive, in which case such award shall be irrevocable. 161
According to the previous article, the origin of the nature of the arbitration decision is primary and vulnerable to refutation by appeal within 30 days of the date of informing the opponents about the arbitration decision.162 A request for an appeal is submitted to the High Committee.163 However, it provides for the decision of the parties in the dispute process, regardless of whether the decision will be appealed or not, to be included in the arbitration deed. A decision that the case will not be appealed serves efficiency and early closure in labour disputes.164
157Saudi Labour and Workers Law of 1969, above n 35, art 183/2. 158
Naal, above n18, 306-307.
159Saudi Labour and Workers Law of 1969, above n 35, art 183/5. 160 Ibid art 183/3. 161 Ibid art 183/4. 162 Ibid art 180. 163 Naal, above n 18, 306. 164Ibid.
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The Saudi Labour and Workers Law states that the arbitration decision has to be registered with the office of the said committee within one week of its rendering; this is based on Article 183/6.
The arbitrators, award shall be registered with the office of the said committee within one week of its rendering. 165
This may be done by one or both litigants. Delay in registering with the office of the primary committee does not make the award invalid as registration is a provision for execution, not for validity.166
In all cases, the arbitration decision is not executable until it is registered with the office of the said primary committee and given the form for execution by the chairman of the committee. According to Article 184:
The arbitrators' awards shall be executed after registration with the office of the appropriate primary committee, and after due endorsement for execution by the chairman of the committee.167
The above feature is the most significant of the previous rules and procedures for labour arbitration in accordance with the Labour and Workers Law of 1969. The previous procedures had continued to be applied for labour arbitration in the KSA for more than 35 years. Although labour arbitration was organized through the previous Labour and Workers‟ Law of 1969, a search of cases of labour disputes in the KSA during this period shows that there were no practical issues resolved by arbitration based on this law.
2.4.3 The Current Law of Labour Arbitration in the KSA
In 2005, the current legislation regarding labour in the KSA was issued under the name "Saudi Labour Law".168As discussed in section 2.2.5, Article 244 of the Saudi labour law of 2005 repealed all labour texts in the 1969 Labour and Workers Law including the arbitration articles.169
The current labour law of 2005 includes the right of both disputing parties to select arbitration as an alternative means of settling labour disputes in the KSA. It states that labour arbitration procedures are done according to the Saudi arbitration law,170 based on Article 224:
The work contract parties may incorporate a clause in the work contract providing for settlement of disputes through arbitration or may agree to do so after the dispute
165 Saudi Labour and Workers Law of 1969 , above n 35, art 183/6 166Al-Kialy, above n 16, 522.
167 Saudi Labour and Workers Law of 1969, above n 35, art 184. 168Saudi Labour Law of 2005, above n 44.
169
Ibid 244.
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arises. In all cases, the provisions of the Arbitration Law and its Implementing Regulations in force in the KSA shall apply.171
According to the previous article, from 2005 until the middle of 2012, the Saudi Arbitration Law of 1983 was applicable when labour dispute parties chose the optional arbitration method to resolve labour disputes in the KSA. While in mid-2012 in the KSA, the Saudi Arbitration Law of 1983 was cancelled and the new Saudi Arbitration Law issued in 2012. The new Saudi Arbitration Law of 2012 is now the applicable law for the optional arbitration method to resolve labour disputes in the KSA.
Chapter 8 of thesis will include a detailed study of the method currently used in the arbitration of labour disputes in the KSA.