END OF SERVICE BENEFIT POLICY – KINGDOM OF SAUDI ARABIA

TABLE OF CONTENTS

1. OBJECTIVES ........................................................................................................................ 1
2. DEFINITIONS ....................................................................................................................... 1
3. ELIGILIBITY .......................................................................................................................... 2
4. POLICY EFFECTIVE DATE ................................................................................................... 2
5. POLICY CRITERIA ................................................................................................................ 2
5.1 End of Employment ............................................................................................................ 2
5.2 Employee’s voluntary resignation – Articles 84 and 85 of the Labour Law .................... 2
5.3 Termination for cause under Article 80 of the Labour Law ............................................. 3
5.4 Internal GE move from a GE Entity in KSA to a GE Entity outside KSA ........................... 3
5.5 Transfers to another GE Entity within KSA ....................................................................... 3
6. EFFECT OF STATE PENSION FOR GCC NATIONALS ON EOSB ENTITLEMENT ................ 5
7. PAYABLES IN ADDTION TO EOSB ...................................................................................... 5
8. RECOVERABLES FROM THE EOSB PAYMENT ................................................................... 5
9. RETIREMENT AND RELATED EOSB CALCULATION ........................................................... 6
10. EMPLOYEE DEMISE OR HEALTH CONDITION ................................................................... 6
11. STATUS OF POLICY............................................................................................................. 6

TOC - 1
1. OBJECTIVES

▪ Under the Labour Law (as defined below) of the Kingdom of Saudi Arabia (“KSA”), GE may be required
to pay End of Service Benefit to Employees upon the termination of their employment with the
Company (defined below). The purpose of this policy is to provide some guidance regarding how EOSB
shall be calculated in the following cases: (i) any eligible Employee who transfers employment from
one legal GE entity to another GE entity; and (ii) any eligible Employee who exits from GE altogether.
▪ This policy does not apply to any joint venture or GE affiliate whose compensation and benefits have
not been harmonized with GE’s Compensation and Benefits (C&B) in KSA.
▪ This policy is non-contractual and does not form part of an Employee’s terms and conditions of
employment.

2. DEFINITIONS
▪ Company: A GE Entity in KSA.
▪ Employee: any individual with an indefinite or definite term contract of employment with a GE Entity
in KSA.
▪ EOSB: End of Service Benefit payable as required by the Labour Law in KSA.
▪ GCC: The Cooperation Council for the Arab States of the Gulf (formerly known as the Gulf
Cooperation Council) comprising: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab
Emirates.
▪ GE Entity: A legal entity in KSA in which GE has 60% or above ownership and/or management
control.
▪ GE Service: Service accumulated while working continuously in one or more GE Entity within KSA
without a break in employment service.
▪ Labour Law: The Labour Law of KSA, promulgated by the Royal Decree No. (D/51) dated 23/8/1426
AH and its Regulations, as amended from time to time.
▪ Monthly Gross Salary: Yearly Gross Salary (defined below) divided by 12 months.
▪ Transfers: Any transfer of employment from one GE Entity to another within KSA.
▪ Yearly Gross Salary: For the purposes of the EOSB calculation, in accordance with Article 86 of the
Labour Law, Yearly Gross Salary is comprised of:
­ annual basic salary;;
­ annual housing allowance; and
­ annual transportation allowance. If the Employee is using a car provided by GE, then the
transportation allowance is as per the policy and band.
Unless otherwise required by law, any other allowances, bonuses or variable compensation not
mentioned in this policy shall not be included in the definition of Yearly Gross Salary or EOSB
calculation. In addition, in accordance with Article 10 of the Labour Law, ‘month’, ‘monthly’, ‘year’,

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Effective Date: 14th October 2018
 ‘yearly’ and any other references in time shall be construed by reference to the Gregorian calendar
(unless otherwise required by law).

3. ELIGILIBITY
▪ This policy applies to full-time employees employed under an indefinite or definite term contract,
working for a GE Entity in KSA, subject always to the provisions of the Labour Law.

4. POLICY EFFECTIVE DATE

▪ This policy will take effect on 14th October 2018 and will apply to all transfers/exits that occur on or
after that date.

5. POLICY CRITERIA
5.1 End of Employment
Save as set out further in this policy, upon the termination of an Employee’s employment with a GE
Entity, if the Employee is entitled to EOSB in accordance with Article 84 of the Labour Law, it shall be
calculated as follows:
• Half-month Monthly Gross Salary (as defined in this policy) for each complete year of service
for the first five years of service; and
• One-month Monthly Gross Salary (as defined in this policy) for each complete year of service
in excess of five years.
EOSB will be calculated on final Yearly Gross Salary (i.e. Yearly Gross Salary as at the date of
termination or Transfer of employment) and will be prorated for any periods of service of less than
one year. The Employee’s length of service for the purposes of calculating the EOSB will be calculated
from the date the Employee commenced GE Service (subject to section 5.5 below). The Employee will
be entitled to an EOSB for the portions of the year in proportion to the time spent in GE Service.

5.2 Employee’s voluntary resignation – Articles 84 and 85 of the Labour Law

If the Employee’s employment is terminated by the Employee’s resignation, EOSB (if applicable) shall
be calculated as follows:
Period of continuous service EOSB entitlement
Less than 2 years’ service Nil (per Article 85 of the Labour Law)
2 years or more, but less than 5 years One-third of the full EOSB (as set out
at 5.1 above)
5 years or more, but less than 10 years Two-thirds of the full EOSB
10 years or more The full EOSB award

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 In accordance with the Labour Law, the above reductions will not apply (i.e. the Employee will be
entitled to the full EOSB) if resignation is for one of the following reasons:
• in the circumstances permitted under Article 81 of the Labour Law; or
• because of force majeure (that is, unforeseen circumstances beyond their control, as per
Article 87 of the Labour Law); or
• in the case of female Employees, within six months after getting married or within three
months after giving birth.

5.3 Termination for cause under Article 80 of the Labour Law

Where an Employee’s employment is summarily terminated for any of the reasons set out in Article
80 of the Labour Law, the Employee will not be entitled to any EOSB.

5.4 Internal GE move from a GE Entity in KSA to a GE Entity outside KSA

Where an Employee transfers from a GE Entity in KSA to another GE Entity outside of KSA, regardless
of whether that GE Entity is in the GCC or not, the Employee will be paid out any EOSB entitlement in
full (as per 5.1 above). The accrued EOSB cannot be transferred to any GE Entity in another country.
However, if the Employee transfers to a country where EOSB is applicable, then we will recognise
seniority for the purposes of calculating EOSB in the new country (so that the Employee may benefit
from any accelerated EOSB benefit earlier). To illustrate, if the Employee works in Bahrain for 4 years,
and then works in KSA for 2 years, the Employee’s entitlement to EOSB shall be as follows:
• the Employee’s EOSB entitlement for years 1 – 4 (inclusive) in Bahrain shall be calculated in
accordance with the laws applicable in Bahrain, and shall be paid in full at the end of the
Employee’s service in Bahrain; and
• the Employee’s EOSB entitlement in KSA shall begin at zero, however, as seniority is recognised,
the EOSB calculation for years 1 – 2 in KSA (which is years 5 – 6 overall) shall be calculated as
follows:
a) for the first year of employment in KSA (which is the fifth overall year of service in the
GCC), the employee shall be entitled to half-month Monthly Gross Salary; and
b) for the second year of employment in KSA (which is the sixth overall year of service
in the GCC), the employee shall be entitled to one-month Monthly Gross Salary.
In this manner, although the Employee’s EOSB restarts upon transfer to KSA, the Employee’s earlier
service in Bahrain is recognised so that the accelerated EOSB entitlement applies after the second
year of service in KSA (rather than after five years’ of service per the Labour Law).

5.5 Transfers to another GE Entity within KSA

Where Employees transfer between GE Entities within KSA, they will have two options as to their
EOSB, as follows:
• Option 1: Receive full payment of accrued EOSB balance (as per 5.1) for the period up to the
transfer date from the old GE Entity, and with effect from the transfer date, begin fresh

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 accrual of EOSB with the new GE entity in accordance with the Labour Law (i.e. there will be
no recognition of prior service);
• Option 2: Transfer accrued EOSB balance (and GE Service) to the new GE Entity and continue
to accrue EOSB as per the guidelines in this policy.

To illustrate the difference between the two options, please see the example below of an Employee
leaving the GE Entity in KSA, after 7 years of service and transferring to another GE Entity in KSA:
GE Entity 1 GE Entity 2 Total
GE Service 3 years 4 years 7 years

Option 1: Employee takes EOSB when leaving GE Entity 1, calculated based on last Yearly Gross
Salary in Entity 1 (as per 5.1) for 3 years. The EOSB balance is reset to zero when employee joins GE
Entity 2. The EOSB when employee leaves GE from Entity 2 is calculated based on the last Yearly
Gross Salary in Entity 2 (as per 5.1) for 4 years. The seniority will be allowed for the calculation of
EOSB however, the number of years that will be paid will be as per the 2nd Legal entity start and end
date. To illustrate, the EOSB entitlement shall be as follows:
Year EOSB entitlement Paid by
1 Half-month Monthly Gross Salary GE Entity 1
2 Half-month Monthly Gross Salary GE Entity 1
3 Half-month Monthly Gross Salary GE Entity 1
4 Half-month Monthly Gross Salary GE Entity 2
5 Half-month Monthly Gross Salary GE Entity 2
6 One-month Monthly Gross Salary GE Entity 2
7 One-month Monthly Gross Salary GE Entity 2

Option 2: Employee transfers their EOSB when leaving GE Entity 1 to GE Entity 2. The EOSB payable
when the Employee leaves GE Entity 2 after 7 years will be calculated using the last Yearly Gross
Salary and 7 years of GE Service (as per 5.1). To illustrate, the EOSB entitlement shall be as follows:
Year EOSB entitlement Paid by
1 Half-month Monthly Gross Salary GE Entity 2
2 Half-month Monthly Gross Salary GE Entity 2
3 Half-month Monthly Gross Salary GE Entity 2
4 Half-month Monthly Gross Salary GE Entity 2
5 Half-month Monthly Gross Salary GE Entity 2
6 One-month Monthly Gross Salary GE Entity 2
7 One-month Monthly Gross Salary GE Entity 2

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6. EFFECT OF STATE PENSION FOR GCC NATIONALS ON EOSB ENTITLEMENT
If the Employee is a GCC national, the Employee may be eligible to participate in the state pension
scheme of his/her home GCC state. EOSB shall be payable in addition to any pension entitlement that
the Employee may be eligible for (i.e. the EOSB benefit and the pension entitlement are NOT mutually
exclusive).

7. PAYABLES IN ADDTION TO EOSB

Upon the termination of an Employee’s employment with a GE Entity, GE may make the following
payments in addition to the EOSB, as applicable:
­ Notice period payment (if notice is not worked);
­ Pro-rated Home Leave Ticket entitlement if the exit is before the usual pay-out date (which
may vary from year to year, however, has been the May payroll in recent years);
­ Pro-rated annual leave entitlement (calculated by dividing Yearly Gross Salary by 260 working
days);
­ One-way air repatriation ticket cost (in line with GE policy, the cost of such tickets will be as
per the GE Travel Desk (Dnata) quotation for the last day at GE – applicable only for non-KSA
national Employees);
­ Travel & Living (T&L) claims if anything to be paid to employee (e.g. cash claims etc.); and/or
­ C&B claims if anything to be reimbursed (e.g. tuition etc).

8. RECOVERABLES FROM THE EOSB PAYMENT

In accordance with Article 88 of the Labour Law, GE may deduct any work-related debt owed by the
Employee to GE from the EOSB. This includes (but is not limited to):
­ Salary if paid excess;
­ Personal phone calls;
­ Traffic fines if using company car;
­ Personal DHL if reported;
­ Pro-rated Home Leave Ticket entitlement paid in advance if the exit is after the usual pay-out
date;
­ Housing Allowance paid in advance;
­ Excess availed annual leave (calculated by dividing Yearly Gross Salary by 260 working days);
­ Transfer allowance part of relocation policy (if employee’s exit is voluntary within 12 months
then full 100% recovery);
­ T&L recoverable (in line with the T&L policy);
­ Tuition recoverable if Employee has been reimbursed for the time after exit from GE;
­ Education assistance program as per policy; and/or
­ Employee Social Security Contribution for the exit month (applicable for Saudi Nationals
only).
The above list is not exhaustive.

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9. RETIREMENT AND RELATED EOSB CALCULATION
• Under Article 74 of the Labour Law, an Employee’s employment contract will expire or shall
terminate if the Employee reaches the retirement age (i.e. 60 years of age for male Employees
and 55 years of age for female Employees), unless it is extended by mutual agreement subject
to the Employee’s health as well as other factors such as productivity and performance.
• If an Employee’s employment terminates due to retirement, he/she will be entitled to the
EOSB in full (as per 5.1 above).

10. EMPLOYEE DEMISE OR HEALTH CONDITION

• If an Employee’s employment terminates due to the Employee’s death, the Employee’s family
(i.e. the Employee’s legal heirs) will be entitled to receive the EOSB payment in full (as per 5.1
above). The Employee’s family may be required to provide documents evidencing their right
to receive the payment on behalf of the Employee.
• If the Employee’s employment terminates due to the Employee’s incapacity (i.e. the
Employee is unable to perform his/her duties due to a health condition), the Employee will
need to provide a certificate from the Saudi Health Authorities (or a Hospital approved by the
Company) to confirm his/her medical condition per Article 79 of the Labour Law. Subject to
this requirement being met by the Employee, the Employee will be eligible to receive EOSB in
full (as per 5.1 above).

11. STATUS OF POLICY

This policy is owned and managed by GE which reserves the right to the final interpretation of this policy
and to review its contents and application as the needs of the Company dictate. This includes the right
to amend or withdraw at any time, subject to any minimum requirements of the Labour Law and any
other relevant laws applicable in KSA.

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 EMPLOYEE ACKNOWLEDGMENT AND ACCEPTANCE

I acknowledge having received a copy of this “End of Service Benefit Policy – Kingdom of Saudi Arabia”. I
agree that any entitlement I may have to EOSB shall be calculated in accordance with this policy, unless
otherwise required by law.

Name: ______________________

Signature: ______________________

Date: ______________________

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Issue Date: 14th October 2018
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