Disciplinary penalties under the Saudi Labor Law are governed by four successive constraints: a closed list of penalty types, a confined source that may not be departed from, numerical ceilings that may not be exceeded, and a procedure the Law requires before the penalty is imposed.
The error usually lies not in choosing a penalty that does not exist, but in exceeding a numerical ceiling or dropping a step from the procedure. This guide sets out the four constraints as they appear in Articles 66, 67, 70, 71 and 72.
1. The permitted penalties
Article 66 confines the disciplinary penalties that may be imposed on the worker to the following:
- A warning
- A fine
- Withholding or deferring a raise for a period not exceeding one year
- Deferring a promotion for a period not exceeding one year
- Suspension from work with withholding of wage
- Dismissal in the cases the Law lays down
Two of these penalties carry a time limit inside the text itself: withholding or deferring a raise and deferring a promotion, both of them for a period not exceeding one year. The year here is not an administrative custom but a constraint in Article 66. Measuring this constraint against a particular case requires knowing the date the penalty began and the date it ended, and both are facts that get recorded.
In practice, what is deducted from wages at an establishment does not all come from a single source: some of it is recorded in the payroll run, and some of it is recorded as a fine. The deduction ceiling in Article 70 applies to the fine. Whether a particular deduction is characterised as a fine within the meaning of this Article is a matter to be referred to the statutory text and the competent authority.
2. No penalty outside the Law or the regulation
Article 67 lays down that the employer may not impose a penalty that is not provided for in the Labor Law or in the work-organisation regulation.
The source is therefore twofold and confined: the Law itself, and the work-organisation regulation. What appears in neither may not be imposed, even if it has been agreed.
The regulation itself, and what the Law leaves to it, are explained in the guide to the work-organisation regulation.
Hence the importance of Article 13, which requires every employer to prepare a work-organisation regulation and to post it in a visible place for those to whom it applies. The regulation is not an optional organisational document; it is one of the two sources of penalty alongside the Law.
The effect of that is practical and direct: the second source does not exist without a regulation. The effect of the absence of a regulation, or of its not being posted, on a particular penalty is a matter to be referred to the statutory text and the competent authority.
This is why the first thing reviewed in any dispute over a penalty is not the violation itself, but: is there a text that permits this particular penalty? And where does it sit: in the Law or in the regulation?
3. The numerical ceilings
Article 70 sets four ceilings that may not be exceeded:
- The fine for a single violation: not exceeding 5 days’ wage.
- One penalty per violation: more than one penalty may not be imposed for a single violation.
- Total fine deductions in the month: not exceeding 5 days’ wage.
- Suspension from work without pay: not exceeding 5 days in the month.
The first and third ceilings are different even though their figures are alike: the first is a ceiling for a single violation, and the third is a ceiling on the total deducted in the month however many violations there are.
4. How the three numerical ceilings work within one month
Three of Article 70’s ceilings are numerical: the fine for a single violation, the total of fines in the month, and the days of suspension. The fourth is a rule, not a figure: one penalty per violation. The three are monitored at once, each on its own measure, which is why their effect shows over a full month rather than in a single incident.
Assumed inputs (the example’s own assumption, not a statutory rule): an employee committed three violations in one month, and the establishment decided a fine for each of them.
What the text says: the fine for a single violation does not exceed 5 days’ wage, and the total deducted in the month does not exceed 5 days’ wage either.
Applying it: the ceiling for a single violation here is 5 days’ wage. The ceiling for the whole month is 5 days’ wage as well. If each violation were assessed at a fine of one day, the total is three days, which is below both ceilings. If each were assessed at a fine of two days, each one on its own is below the single-violation ceiling, but the total is six days, which exceeds the monthly ceiling.
This is the paradox that is often missed: every penalty on its own can be entirely correct while their total for the month is in breach. The monthly ceiling is monitored at the level of the month, not at the level of the incident, and it only becomes visible to whoever keeps a running total of what has been deducted.
The same applies to suspension from work without pay: its ceiling is 5 days in the month, it is a ceiling independent of the fines ceiling, and it is counted separately.
5. The procedure the Law requires before imposing the penalty
Article 71 lays down that no penalty may be imposed on the worker except after:
- Notifying him in writing of what is attributed to him
- Questioning him
- Hearing his defence
- Recording that in a minute placed in his file
The text requires these four steps before the penalty is imposed; they are not a discretionary procedure around it. The minute placed in the worker’s file is the trace that establishes that the three preceding steps took place.
6. Notification and the right to object
Article 72 lays down that the worker is notified in writing of the decision imposing the penalty; if he refuses to take delivery or is absent, the notice is sent by registered letter to the address shown in his file. He may then file a written grievance with the competent body at the employer within thirty days (excluding official holidays) from the date he was notified. If the grievance is rejected, or is not decided in writing within fifteen days of its submission, he may object before the labour courts to the decision imposing the penalty within thirty days (excluding official holidays) from the date of rejection or the expiry of the period set for deciding it, whichever is earlier.
The three periods belong to different parties: the first thirty days are the worker’s, for the internal grievance; the fifteen are the employer’s, to reply; and the last thirty are the worker’s, to object before the court. A reader who takes the first thirty days alone concludes that the door closes on day thirty, when the text opens a second one after it. The last thirty days start from whichever of the two dates is earlier: if the employer replies with a rejection late, after the fifteen days have expired, the period has already started running from the expiry and not from the rejection, and the late reply opens no fresh period.
Written notification here is not a repetition of the notification in Article 71: the first concerns what is attributed to him before the penalty, and the second concerns the penalty after it is imposed. From it the objection period begins.
7. The link between penalty and dismissal in Article 80
Dismissal is one of the penalties enumerated in Article 66, in the cases the Law lays down. The cases of dismissal without award, notice or compensation are the nine enumerated in Article 80, and their procedural condition is that the employer enables the worker to state the reasons for his objection to the termination, which is a condition within that same Article.
The relationship between the Article 71 procedure and the Article 80 condition is a matter to be referred to the statutory text and the competent authority.
8. The penalties record: what makes it fit for proof
Articles 71 and 72 call not only for a decision, but for a written trace at three distinct moments: notification of what is attributed to the worker, the minute recording the questioning and the defence, and notification of the penalty after it is imposed.
Each of these moments has a date, and the dates are not a formality: Article 72 requires that the worker be notified of the penalty in writing, and makes the date of that notification the starting point for the thirty-day internal grievance period, excluding official holidays; the date the grievance is rejected, or the period for deciding it expires — whichever is earlier — is then the starting point for the thirty-day period to object before the labour courts.
The effect of that is practical: two establishments may take the same decision on the same incident, and one of them holds a dated minute in the worker’s file while the other holds nothing because the questioning took place orally. The difference between them is not in the substance of the decision, but in what can be referred back to later. The effect of that on a particular case is referred to the statutory text and the competent authority.
This explains why the employee file is the place the text designated for the minute: because Article 71 provides that the minute be placed in his file. Where the remaining papers are kept is an organisational matter the text does not settle.
9. What the text does not address
- Graduating the penalty according to the gravity of the violation or its repetition. The particular case is to be referred to the statutory text and the competent authority.
- The form of the questioning and its duration. The particular case is to be referred to the statutory text and the competent authority.
- The body to which the objection is submitted and its effect on the penalty taking effect. The particular case is to be referred to the statutory text and the competent authority.
- The amount of the fine where the employer breaches these Articles. The schedule of violations and sanctions is outside the scope of this guide, and no figure may be stated.
10. What your system should record
- The adopted work-organisation regulation, and where and when it was posted, because it is one of the two sources of penalty.
- Written notification of what is attributed to the worker and its date.
- The minute of questioning and defence, placed in the worker’s file.
- The penalty imposed, its type and date, and the violation it was built on.
- The total of fines deducted in the month, because it has a ceiling independent of the single-violation ceiling.
- Days of suspension without pay in the month.
- The date the worker was notified of the penalty in writing.
11. A checklist before imposing any penalty
- Is the penalty one of the enumerated penalties in Article 66?
- Is it provided for in the Law or in the work-organisation regulation?
- Was the worker notified in writing of what is attributed to him? Was he questioned? Was his defence heard? Was that recorded in a minute placed in his file?
- Is it the only penalty for this violation?
- If it is a fine: does it exceed 5 days’ wage for the single violation? And does the total deducted this month exceed 5 days’ wage?
- If it is suspension without pay: does it exceed 5 days in the month?
- Was the worker notified of the penalty in writing? And does he know he has 30 days to object?
12. Why this turns into a problem
A disciplinary penalty is one of those decisions taken quickly and reviewed late. The failure tends to occur in two places: a monthly ceiling that is exceeded because fines are counted one by one without a total, and a minute that was never drawn up because the questioning took place orally.
Both are facts capable of being recorded: a total deducted in a month, and a dated minute in a file. Their absence makes proving the validity of the penalty impossible, even where the penalty was in itself correct.
This is where it pays to have an employee’s facts in a single file. That is what Qoyod HR provides: a single employee file holding the contract, the documents and their expiry dates with an alert before them, an attendance record for each employee, and their leave, salary and end-of-service entitlements. End-of-service, overtime and leave-balance calculations are built into the system. It is a standalone HR system with its own subscription, and the link with Qoyod accounting is available now.
A standalone Saudi HR system
One employee file holding the contract, the documents and their expiry dates, the attendance record, leave, salary and end-of-service entitlements. End-of-service, overtime and leave-balance calculations are built into the system.
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Frequently asked questions
What disciplinary penalties are permitted under the Saudi Labor Law?
Article 66 confines them to: a warning, a fine, withholding or deferring a raise for a period not exceeding one year, deferring a promotion for a period not exceeding one year, suspension from work with withholding of wage, and dismissal in the cases the Law lays down.
May a penalty not mentioned in the regulation be imposed?
No. Article 67 lays down that the employer may not impose a penalty that is not provided for in the Labor Law or in the work-organisation regulation. The source is confined to these two.
What is the maximum fine for a single violation?
Article 70 lays down that the fine for a single violation shall not exceed 5 days’ wage, and that the total deducted from the worker’s wage for fines in the month shall not exceed 5 days’ wage either. They are two different ceilings even though their figures are alike.
May more than one penalty be imposed for a single violation?
No. Article 70 lays down that more than one penalty may not be imposed for a single violation.
What procedure is required before imposing the penalty?
Article 71 lays down that no penalty may be imposed except after notifying the worker in writing of what is attributed to him, questioning him, hearing his defence, and recording that in a minute placed in his file. The text requires these four steps before the penalty is imposed.
May the worker object to the penalty?
Yes, in two steps. Article 72 lays down that the worker is notified in writing of the decision imposing the penalty; if he refuses to take delivery or is absent, the notice is sent by registered letter to the address shown in his file. He may then file a written grievance with the competent body at the employer within thirty days (excluding official holidays) from the date he was notified. If the grievance is rejected, or is not decided in writing within fifteen days of its submission, he may object before the labour courts to the decision imposing the penalty within thirty days (excluding official holidays) from the date of rejection or the expiry of the period set for deciding it, whichever is earlier.
Statutory references
This guide is based on the Saudi Labor Law: Article 13 (the work-organisation regulation), Article 66 (the permitted penalties), Article 67 (confining the source of penalty), Article 70 (the numerical ceilings), Article 71 (the procedure preceding the penalty), Article 72 (notification and the right to object), and Article 80 (the cases of termination without award, notice or compensation).
As to the effect of the amendments made by Royal Decree M/44 of 1446 AH, in force since 19 February 2025: Article 80 was last amended by Decree M/46 and M/44 did not touch it. As for Articles 13, 66, 67, 70, 71 and 72, this guide has not established an explicit amendment for them, so it is not sound to assert that they were amended or were not, and reference on that point is to the updated statutory text.
This guide is a regulatory explanation, not legal advice. In an existing dispute or a particular case, the statutory text and the competent authority remain the reference.
