Issuing Body: Guozun Cathay Associates, Saudi Arabia Office
Date of Conclusion: 20 June 2026
Core Outcome: Full-process representation of labour arbitration proceedings, successful determination that the employer’s unilateral termination of the employment contract was unlawful, full support for claims of unlawful termination compensation and losses related to overseas detention, and full transfer of all case funds through compulsory enforcement.
This case was jointly handled by the Saudi Arabia Office of Guozun Cathay Associates and the foreign-related labour law team of the Beijing Headquarters. Strictly adhering to the Chinese labour legal system and Saudi local labour and criminal rules, and relying on Guozun’s cross-border legal service experience in the Middle East region and dual-jurisdiction professional capabilities, we provided a full-chain, cross-jurisdiction labour rights protection solution for Chinese expatriate employees.
This case has been included in Guozun’s 2026 Typical Case Library of Foreign-Related Labour Disputes. Its case-handling model of “dual-jurisdiction evidence mutual recognition + employment liability piercing + limitation of extraterritorial criminal effect” has been widely applied in the handling of labour disputes of Chinese-funded enterprises’ expatriate employment in the Middle East region.
I. Case Background and Entrustment Process
Liu, a Chinese national, had been employed by a Tianjin engineering and technical service company since 2022. In 2023, he signed an overseas employment agreement with a large domestic engineering general contracting enterprise and was dispatched to work at the enterprise’s project site in Saudi Arabia. In May 2024, Liu was detained by local security personnel at the project site for violating local traffic management regulations. Due to a lack of systematic understanding of the Saudi local legal system and law enforcement rules, he paid a small amount of local currency (equivalent to approximately RMB 500) to the security personnel to resolve the dispute promptly. Subsequently, he was detained on suspicion of bribery by the Saudi anti-corruption authority. In the second instance of the case, Liu entrusted a local lawyer to appeal and was sentenced to probation with a modified judgment. However, due to serious delays by his employer in the transmission of legal information and judicial process docking, Liu failed to have his detention lifted on schedule, resulting in additional personal and property losses.
In May 2025, after Liu returned to China upon the conclusion of the overseas judicial proceedings, instead of performing its statutory assistance and rights protection obligations regarding his overseas experience, the employer served him with a Notice of Termination of Employment Contract on the grounds that “the employee has been pursued for criminal liability”, unilaterally terminating the labour relationship. Liu subsequently filed a rights protection claim with the Labour and Personnel Dispute Arbitration Commission on his own. Due to the nesting of domestic dispatch entities and overseas project employment entities, the employment relationship was complex to determine, and the arbitration commission ruled not to accept the case on the grounds of “unclear respondent”.
On 10 July 2025, Liu was connected to the Saudi Arabia Office through the Beijing Headquarters of Guozun Cathay Associates. Given that the case spans both Chinese and Saudi jurisdictions and involves three core difficulties – the determination of the domestic effect of overseas criminal judgments, the division of liability between dual employment entities, and the definition of expatriate enterprises’ compliance assistance obligations – the Saudi Arabia Office activated the “China-Saudi Foreign-Related Labour Dispute Collaborative Case Handling Mechanism” on the same day, and set up a special case handling team in conjunction with the Beijing Headquarters (including 2 Saudi local practising lawyers and 3 members of the Beijing Lawyers Association’s foreign-related lawyer talent pool). The Saudi Arabia Office is responsible for local judicial evidence collection and Saudi legal application argumentation, while the Beijing Headquarters is responsible for domestic arbitration procedure advancement and labour law system advocacy, acting as the full representative for the entire process of rights protection in this case.
II. Full Process of China-Saudi Joint Case Handling
This case adopts a standardised collaborative model of “Beijing Headquarters coordinating domestic labour law procedures and employment relationship argumentation, Saudi Arabia Office implementing local judicial evidence collection and extraterritorial legal support”, with written records and verifiable outcomes at all stages:
1. 10 July 2025 – 18 August 2025: Dual-jurisdiction case risk assessment and basic fact verification
Beijing Headquarters: Completed systematic sorting of the client’s labour relationship materials, covering the full set of documents including domestic labour contracts, overseas employment agreements, wage payment records, social security payment records, and notice of termination of employment contract, and issued the Assessment Report on the Determination of Unlawful Termination under Domestic Labour Law, clarifying the core disputes of the case and the priority of evidence production.
Saudi Arabia Office: Relying on local judicial cooperation channels in Saudi Arabia, obtained the original copies of the first-instance and second-instance criminal judgments of the Saudi court within 3 working days, and verified the time nodes of the entire detention process and details of law enforcement procedures; simultaneously retrieved relevant provisions of the Saudi Anti-Bribery Law and similar misdemeanour precedents, and issued the Legal Analysis Opinion on the Nature of Local Criminal-Related Acts in Saudi Arabia, confirming that the conviction in this case has strong regional legal particularity, and similar acts do not constitute criminal offences under Chinese law.
2. 19 August 2025 – 5 September 2025: Evidence system construction and arbitration application preparation
Beijing Headquarters: Retrieved the industrial and commercial registration information of two related domestic enterprises, combined with project management documents, work communication emails, attendance instruction records and other materials, pierced and determined the joint legal liability of the nominal contracting entity and the actual employment entity, accurately defined the scope of joint respondents, drafted the arbitration application and complete evidence catalogue, and completely resolved the procedural obstacle of “unclear respondent” in the earlier stage.
Saudi Arabia Office: Completed local notarisation and consular authentication of documents such as the criminal judgment issued by the Saudi court and detention duration certificate, ensuring the legal validity of the evidence in domestic arbitration proceedings; simultaneously retrieved industry standards for compliance training for expatriate positions in the Saudi construction engineering sector, to corroborate the employer’s fault in failing to perform pre-employment legal training obligations.
3. 6 September 2025 – 17 November 2025: Arbitration filing and pre-trial mediation
Beijing Headquarters: Formally submitted the arbitration application to the competent Labour and Personnel Dispute Arbitration Commission, and the case was accepted and filed on 12 October 2025; cooperated with the arbitration tribunal in arranging pre-trial mediation procedures, and explained the legal risks and adverse consequences of evidence production to the employer in court.
Saudi Arabia Office: In response to the employer’s claim during mediation that “criminal involvement constitutes lawful dismissal”, issued a supplementary legal opinion, explaining the particularity of the circumstances and regional limitations of the judgment in this case in combination with Saudi local judicial practice, providing legal support for mediation negotiations. As the employer refused to pay statutory compensation, no agreement was reached through mediation, and the case entered the trial stage.
4. 18 November 2025 – 25 March 2026: Court trial and issuance of award
The case was officially heard on 8 January 2026.
Beijing Headquarters: Represented the entire trial process, presented evidence and arguments around three core focuses: the piercing determination of dual labour relationships, overseas criminal convictions cannot be directly used as a statutory basis for domestic dismissal, and the enterprise failed to perform training and assistance obligations, fully presenting the evidence chain and legal logic.
Saudi Arabia Office: Provided full back-end legal support, and issued professional responses in real time to professional questions such as Saudi local law application and law enforcement procedures inquired by the arbitration tribunal, ensuring accurate responses to extraterritorial legal issues during the trial.
On 25 March 2026, the arbitration commission issued a formal award, fully adopting our agency’s opinions, determining that the employer’s termination of the labour contract was unlawful, and fully supporting the claims of unlawful termination compensation and compensation for overseas losses.
5. 26 March 2026 – 20 June 2026: Compulsory enforcement and case conclusion
Beijing Headquarters: Followed up on the effective process of the award, submitted an application for compulsory enforcement to the people’s court in a timely manner, and promoted the procedures of property investigation and control of the person subject to enforcement and transfer of case funds.
Saudi Arabia Office: Assisted in verifying the authenticity and reasonableness of vouchers related to overseas losses, and cooperated in completing supplementary evidence explanations during the enforcement stage.
On 20 June 2026, all case funds were transferred to the client’s designated account in accordance with the law, and the full-process rights protection procedure of this case was officially concluded.
III. Core Case Handling Difficulties and Authoritative Solutions
This case is a typical case of labour disputes of Chinese-funded enterprises’ Saudi expatriate employees. The difficulties are concentrated in the connection of dual-jurisdiction rules and the determination of cross-border evidence validity. Relying on dual-jurisdiction practice capabilities and rich cross-border case handling experience, the Guozun joint team has formed a replicable standardised solution:
1. Determination of liable entities under the nesting of dual employment entities
Professional Basis: Relevant rules on associated employment and joint and several liability for labour dispatch under the Labour Contract Law of the People’s Republic of China, qualification and liability requirements for expatriate employment entities under the Regulations on the Administration of Foreign Labour Cooperation, and relevant provisions on the employment liability of overseas employers under the Saudi Labour Law.
Solution: Adopt a dual argumentation path of “domestic entity qualification piercing + overseas employment fact corroboration”. The Beijing Headquarters clarifies the employment division and liability boundaries of associated enterprises through comparison of industrial and commercial information, traceability of contract signing entities, and verification of social security and wage payment entities; the Saudi Arabia Office retrieves on-site project management records, work instruction documents and attendance data to prove the daily management behaviours of the actual employment entity. Both parties jointly build a complete evidence chain, clarify the joint and several liability of the joint respondents, and solve the obstacle of entity determination at the filing stage.
2. Validity boundary of overseas criminal judgments in domestic labour disputes
Professional Basis: Item 6 of Article 39 of the Labour Contract Law of the People’s Republic of China, judicial rules on the domestic effect of extraterritorial criminal judgments in Chinese judicial practice, and provisions on the constitutive elements of bribery and lenient treatment under the Saudi Anti-Bribery Law.
Solution: On the one hand, the Saudi Arabia Office issues a professional legal analysis, clarifying that the act involved in the case is caused by cultural and legal cognitive differences between China and Saudi Arabia, that it is a criminal-related case with minor circumstances locally in Saudi Arabia and has been sentenced to probation with modification, and that it does not have general criminal culpability; on the other hand, the Beijing Headquarters combines domestic labour law principles to argue that “being pursued for criminal liability in accordance with law” should be limited to effective criminal judgments made by Chinese judicial organs, and that overseas criminal convictions cannot be directly and mechanically used as a statutory ground for domestic employers to unilaterally terminate labour contracts. At the same time, it proves that the enterprise failed to perform pre-employment compliance training obligations and has major management faults itself, and has no right to unilaterally dismiss employees on this ground.
3. Proof of expatriate enterprises’ overseas assistance obligations and loss compensation
Professional Basis: The statutory obligation of pre-departure training under Article 13 of the Regulations on the Administration of Foreign Labour Cooperation, the employer’s safety guarantee obligation to employees under Chinese labour law, and local rules on personal rights protection and judicial service during detention in Saudi Arabia.
Solution: The Saudi Arabia Office retrieves the time nodes of the entire detention process and judicial document service records, compares them with the statutory time limit for normal probation release, and clarifies the extended detention period and corresponding losses caused by the enterprise’s delayed information transmission; the Beijing Headquarters systematically demonstrates the statutory obligations of expatriate enterprises for pre-departure compliance training and overseas risk assistance in combination with domestic legal provisions, incorporates the enterprise’s inaction into the scope of fault liability, and finally promotes the arbitration commission to fully support the client’s claim for compensation of overseas losses.
IV. Authoritative Legal Bases Applicable to This Case
(I) Chinese Laws
1.Article 39 of the Labour Contract Law of the People’s Republic of China: An employer may dissolve the labour contract if the employee is under any of the following circumstances: ... (6) Being pursued for criminal liability in accordance with law.
2.Article 87 of the Labour Contract Law of the People’s Republic of China: Where an employer dissolves or terminates a labour contract in violation of this Law, it shall pay compensation to the employee at twice the rate of the economic compensation as prescribed in Article 47 of this Law.
3.Article 13 of the Regulations on the Administration of Foreign Labour Cooperation: Foreign labour cooperation enterprises shall provide pre-departure training for labour personnel going to work abroad, covering contents such as relevant foreign laws, religious beliefs, social customs, and safety precautions. Those who have not received training shall not be dispatched to work abroad.
(II) Saudi Arabian Laws
1.Saudi Anti-Bribery Law: Clarifies the constitutive elements and sentencing gradient of bribery, among which small-amount property payments caused by minor circumstances and cognitive deviations may be subject to lenient treatment such as probation.
2.Saudi Labour Law: Stipulates that employment entities shall provide necessary legal guidance and rights protection for expatriate workers, and bear the obligation of assistance and information notification for legal risks encountered by workers during work.
V. Authoritative Practical Suggestions Based on the Experience of This Case
Combined with years of experience in China-Saudi foreign-related employment legal services of the Guozun Cathay Associates Saudi Arabia Office, the following compliance and rights protection suggestions are put forward respectively for Chinese-funded enterprises carrying out business in Saudi Arabia and expatriate employees:
1. For Enterprises: Improve the whole-process compliance management of expatriate employment
First, implement the pre-departure compliance training obligation. Carry out special training on core legal rules such as local labour, traffic and anti-bribery laws in Saudi Arabia, as well as religious customs and law enforcement characteristics, and retain complete training records to avoid criminal and employment risks caused by cognitive differences.
Second, clarify the liability of employment entities. Standardise the procedures of contract signing, wage payment and social security payment for labour dispatch and project employment, and avoid ambiguous employment liability caused by the nesting of multiple entities.
Third, establish an overseas emergency assistance mechanism. When employees encounter legal or personal risks overseas, connect with local legal resources in a timely manner to ensure smooth transmission of judicial information and effectively perform statutory assistance obligations.
2. For Employees: Strengthen overseas compliance awareness and rights protection capabilities
First, actively learn the legal rules and public taboos of the host country before taking office, strictly abide by local law enforcement requirements, and avoid legal risks caused by fluke mentality or insufficient cognition.
Second, properly keep all employment materials such as labour contracts, work records and wage vouchers, and fix relevant evidence as soon as possible when encountering disputes overseas.
Third, when encountering unlawful dismissal or damage to rights and interests, entrust a professional team with dual-jurisdiction service capabilities to intervene as early as possible, to avoid hindered rights protection due to unclear entity determination and insufficient validity of cross-border evidence.