JEDDAH, 5 July 2006 — The Primary Commission at the Jeddah Labor Office yesterday issued a verdict in favor of former employees at the Saudi Dairy Foodstuff Company (SADAFCO) who were made redundant in May.
Sacked employees had alleged that the company terminated the contract of only Saudis without prior notification and was therefore guilty of discrimination. In response SADAFCO officials had said that only 30 percent of dismissed employees were Saudis.
A statement issued by SADAFCO in response to yesterday’s verdict said that the company fully respected the commission’s decision but would appeal.
The company explained that employees were let off due to financial losses incurred as a result of the boycott of Danish products in response to the blasphemous cartoons of Prophet Muhammad (peace be upon him) published in a Danish newspaper in September.
According to the SADAFCO statement, the company continues to suffer huge losses and a fall in share prices as a result of the boycott. The company also said that an increase in the price of raw material, a decrease in the company’s share of the dairy and food market, closure of two factories and a halt in production of more than 100 products, left SADAFCO with more employees than needed.
The statement further said that only in the best interests of the company the difficult step of terminating employment was taken with an aim of continuing the operation of a national economical landmark and protecting the interests of the company’s 80,000 shareholders.
Public Relations Director Talal Al-Nunu said that the boycott cost the company SR25 million in losses. Although company officials confirmed to Arab News that sales were bouncing back gradually as the boycott fervor waned.
When asked by Arab News if they had rushed into their decision of closing down two factories and stopping the production of a hundred products, Al-Nunu replied that before the boycott a number of those products were “not selling.”
“So our company consulted international advisory firms to study the matter,” he said. “During our survey the boycott occurred, turning the situation from bad to worse.”
The statement further said that company officials were convinced that the procedures that were taken in letting workers off were legal.
“SADAFCO has the right to exercise its right to go to court to seek the truth and to follow all legal avenues to defend the company in all judicial sectors in the Kingdom,” the statement said.
