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Article 83 of Saudi Labor Law allows an employer to stop a worker from working for a competitor or reveal the confidential information and business secrets to a third party. We have discussed it in detail below.
Article 83 of the Saudi Labor Law
If an employee has direct contact with the employer’s customers or business secrets, the employer can include a clause in the employment contract prohibiting a worker to;
- join a competitor’s company for a period of 2 years.
- work as a competitor for a period of 2 years.
- reveal any confidential information to a third party for 10 years.
In order to make this clause valid, it must be agreed upon by the employee and employer in writing.
If an employee violates this clause of the contract inserted under Article 83 (3) of Saudi Labor Law, the employer can take him to the labor office within one year of discovery of such violation.
Can I get the transfer of sponsorship?
You cannot ask your employer for the transfer of sponsorship to a competitor if it is prohibited to do so as per the contract under Article 83 of Saudi Labor Law.
However, if the employer agrees to transfer the sponsorship to a competitor, he cannot challenge the employee later in the labor court.
Sometimes expatriates transfer their sponsorship to a dummy company and then transfer it to a competitor’s company. Keep in mind, if the employer gets to know about it, he can take you to the labor court.
Can I join a competitor on a new visa?
Most of the expatriates who sign a contract prohibiting the worker to join a competitor as per Article 83 of Saudi Labor Law, leave Saudi Arabia on a final exit and enter again on a new work visa to work for a competitor.
They play smartly as they change their phone numbers, social media accounts, and cut down all communication with the previous employer.
The Saudi Embassy or Saudi Immigration does not stop them at any stage as they are out of this arrangement.
The labor court will cancel the work permit of such an employee and may ban him from entering Saudi Arabia again.