Article 114 of the Saudi Bankruptcy Law
المادة 114 من نظام الإفلاس · الفصل الخامس: إجراء التصفية: عقود العمل
The article allows the court, at the trustee's request, to consider ending the employment contracts of workers with the debtor who are connected to its business, under the relevant laws.
Official text (Arabic)
This article has not been amended since the law was issued.
للمحكمة أن تنظر -بناء على طلب الأمين- في إنهاء عقود عمل العاملين لدى المدين ذوي العلاقة بنشاطه وفقاً لأحكام الأنظمة ذات العلاقة.
This is the official Arabic wording, the only legally binding version. We do not translate the law itself; the explanation below is ours. Official source: Bureau of Experts at the Council of Ministers
Article 114 explained in plain English
This article deals with employment contracts with a debtor against which the liquidation procedure has been opened.
Elements of the provision:
- Who requests: The trustee.
- Who decides: The court, which considers the request.
- Subject of the request: Ending the employment contracts of the debtor's workers who are connected to its business.
- The reference: This is done in accordance with the provisions of the relevant laws.
The text implies that the end of employment contracts is not an automatic effect of opening liquidation under this article, but goes through a request from the trustee that the court considers. The article also does not itself set rules for workers' rights on termination, but refers to the relevant laws, which remain the reference for the conditions and effects of termination.
This article comes after Article 113, which makes undue debts payable as soon as liquidation is opened, and before Article 115, which requires the trustee to submit a periodic report to the court at least every 3 months.
Because the matter relates to bankruptcy procedures, a worker or an enterprise would do well to consult a lawyer specializing in bankruptcy and commercial cases to assess its position.
Practical example
The liquidation procedure has been opened for a furniture factory in Riyadh and production has stopped. The trustee asked the court to consider ending the contracts of the workers on the production lines, and the court considers the request in accordance with the provisions of the relevant laws.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
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Frequently asked questions about Article 114 of the Saudi Bankruptcy Law
Do workers' contracts end automatically when the company goes bankrupt?
The article provides that the court considers ending employment contracts at the trustee's request, in accordance with the provisions of the relevant laws.
Who requests ending workers' contracts in liquidation?
The trustee, and the court considers its request.
More articles on Liquidation of the Debtor's Assets
- Article 7
Article 7 bars the liquidation of any person under another law unless its assets cover all its debts and it is not defaulting, and makes management members jointly liable if this is violated.
1- مع مراعاة ما ورد في المادة (الرابعة) من النظام، لا يصفى أي شخص بموجب نظام آخر إلا إذا كانت أصوله تكفي لسداد جميع ديونه وكان غير متعثر. 2- إذا تم حل المدين وت
- Article 69
The debtor continues to manage its business during financial reorganization under the trustee's supervision, and at the trustee's request the court may remove its control in cases of negligence, mismanagement or criminal acts.
1- دون إخلال بصلاحيات ومهمات الأمين، يستمر المدين في إدارة أعماله ونشاطه خلال فترة إجراء إعادة التنظيم المالي تحت إشراف الأمين. 2- إذا ارتكب المدين أو أحد المسؤ
- Article 90
The court opens liquidation or administrative liquidation after financial restructuring ends if the debtor is distressed or bankrupt, the procedure's conditions are met, and the ending was for specified grounds.
تقضي المحكمة -من تلقاء نفسها أو بناء على طلب من ذي مصلحة- بافتتاح إجراء التصفية أو التصفية الإدارية إذا تحققت الشروط الآتية: أ - أن يكون المدين متعثراً أو مفلسا
- Article 92
The article allows the debtor, a creditor or the competent authority to ask the court to open the liquidation procedure if the debtor is distressed or bankrupt.
دون الإخلال بأحكام الأنظمة ذات العلاقة، للمدين أو الدائن أو الجهة المختصة التقدم إلى المحكمة بطلب افتتاح إجراء التصفية للمدين إذا كان المدين متعثراً أو مفلساً.
- Article 93
The article requires that a liquidation request be accompanied by the information and documents the Implementing Regulations specify to be registered, and sets special conditions where one or more creditors file it.
1- يشترط لقيد طلب افتتاح إجراء التصفية لدى المحكمة أن يقدم الطلب مرافقاً له المعلومات والوثائق ذات العلاقة، وفقاً لما تحدده اللائحة. 2- لا يقيد طلب دائن أو أكثر
- Article 94
A creditor's request to open liquidation is not registered if the debtor disputed the debt before the request, and filing it despite proof of the dispute is an abuse of the procedure.
لا يقيد طلب الدائن بافتتاح إجراء التصفية إذا كان المدين قد نازع الدائن في الدين قبل تقدم الدائن بالطلب. ويعد طلب الدائن افتتاح الإجراء مع وجود ما يثبت منازعة ال
The texts are reproduced from the official website of the Bureau of Experts at the Council of Ministers for reference; where they differ, the officially published Arabic text prevails. This content is not legal advice.