JEDDAH, 7 May 2006 — A number of Saudi employees filed a group complaint with the Labor Office in Jeddah on Wednesday. The complaint alleges that the Saudia Dairy and Foodstuffs Co. (SADAFCO) terminated the employees’ services without prior notification and is thus guilty of discrimination.
The employees allege that the financial affairs officer at the company terminated more than 94 Saudi employees while some 1,000 expatriate employees were retained even though many of the expatriates were doing similar jobs.
SADAFCO has issued a statement explaining the reasons behind the terminations, which are related to financial losses because of the boycott of Danish products resulting from the blasphemous cartoons of the Prophet Muhammad (peace be upon him) published in a Danish newspaper.
According to a local newspaper, 25 Saudi employees filed the complaint though 94 were fired. SADAFCO Public Relations Director Talal Al-Nunu told Arab News that there were only 12 employees who filed the complaint; he did not say how many were fired except that those fired represented 30 percent of the company’s Saudi employees.
According to the SADAFCO statement, the boycott cost the company SR25 million in losses in addition to a drop in its share price. Coupled with an increase in the price of raw materials and a decrease in the company’s share of the dairy and food market, the company had to consider ways of protecting itself and the interests of its shareholders. After consultations with experts, the board of directors decided to stop production of some products, reduce expenses by improving competitiveness and reduce the labor force.
The company’s statement says that the company has a plan to lower operating expenses and costs to SR37 million and reduce the number of employees by 70 percent for expatriates and by 30 percent for Saudis.
“This was a difficult decision but it was aimed at protecting shareholders and employees who remain in the company. This decision was made on just basis and with absolute adherence to the Saudi labor law,” Al-Nunu said.
He rejected the accusation that Saudis were the first to be terminated, saying that many Muslim expatriates were dismissed before them.
Al-Nunu said that a study was made on where, in each department, the staff cuts could be made and, accordingly, a reduction in staff of a certain percentage was made in each department. “Each employee was given his salary until the end of his contract, even though some of the contracts have seven months to run,” he added.
The Labor Office is investigating the case to determine reasons for the termination and its legality. It is trying to resolve the problem before it reaches the courts.
