Labor laws and regulations in the Kingdom of Saudi Arabia are a legal framework that regulates the relationship between employers and employees, aiming to protect the rights of both parties and ensure a fair and productive work environment. Understanding these laws is essential for both companies and employees working in the Kingdom. In this comprehensive guide, we will review the most important aspects of the Saudi labor system.
1. Employment Contract:
- Types of Contracts: The employment contract in Saudi Arabia is divided into two main types:
- Fixed-term contract: Ends upon the expiry of the period agreed upon in the contract.
- Indefinite-term contract: Does not include a specific duration and can be terminated according to the terms of the system.
- Conditions of the Contract: The employment contract must be written in Arabic and must include basic information such as the employer’s name, the worker’s name, the place of work, the date of joining work, the type of work, the agreed-upon wage, and the duration of the contract (if it is a fixed-term contract).
- Probationary Period: The employment contract may include a probationary period not exceeding 90 days, extendable for a similar period with a maximum of 180 days. The worker may not be placed under a probationary period more than once with the same employer.
- Termination of the Contract:
- Expiration of Term: The fixed-term employment contract ends upon the expiry of its term unless the parties agree to renew it.
- Resignation: The worker with an indefinite-term contract has the right to resign after notifying the employer with a period of not less than 30 days if he is paid monthly, or 15 days in other cases.
- Dismissal: The employer has the right to dismiss the worker in specific cases stipulated in the labor law, such as the worker committing misconduct or violating his essential duties. The worker also has the right to terminate the contract without notice and with entitlement to compensation in specific cases determined by the system.
2. Working Hours and Leaves:
- Basic Working Hours: A worker may not be employed for more than 8 hours per day or 48 hours per week, with exceptions for certain jobs and activities.
- Weekly Rest: Every worker is entitled to a weekly day off with pay, and a worker may not be employed for more than six consecutive days.
- Annual Leaves: The worker is entitled to annual paid leave of not less than 21 days for each year of service, increasing to 30 days if the worker completes five consecutive years in the service of the employer.
- Sick Leaves: The worker is entitled to paid sick leave according to the regulations stipulated in the labor law.
- Maternity Leave: A female worker is entitled to maternity leave of ten weeks with full pay, distributed as the female worker chooses, starting a maximum of four weeks before the expected date of delivery.
- Other Leaves: The labor law regulates other types of leave such as marriage, death, and performing Hajj rituals leave.
3. Rights and Duties of the Worker:
- Worker’s Rights: Include the right to receive the agreed-upon wage on time, the right to a safe and healthy work environment, the right to the leaves he is entitled to, non-discrimination in treatment, and the right to an end-of-service gratuity upon termination of the contractual relationship.
- Worker’s Duties: Include adhering to the employer’s orders and instructions, performing the agreed-upon work with sincerity and honesty, preserving work secrets, and not working for another party without the employer’s consent (in some cases).
4. Rights and Duties of the Employer:
- Employer’s Rights: Include the right to manage and direct workers, impose penalties on violators according to the work organization regulations, and the right to terminate the employment contract according to the provisions of the system.
- Employer’s Duties: Include paying wages on time, providing a safe and healthy work environment, training and qualifying workers, not assigning the worker work that differs substantially from the agreed-upon work except with his consent, and not discriminating between workers.
5. Wages and Rewards:
- Wage: The wage must be specified in the employment contract and must be fair and appropriate for the work performed.
- Wage Protection System: The labor law requires employers to register expatriate workers in the Wage Protection System (WPS) on the “Mudad” platform, and register them on the “Qiwa” and “Muqeem” platforms, to ensure that wages are paid on time and transparently.
- End-of-Service Gratuity: A worker who has completed one year or more of service with the employer is entitled to an end-of-service gratuity upon termination of the contractual relationship, which is calculated based on the length of service and the worker’s last wage.
6. Regulations for Employing Non-Saudis:
- Employment Conditions: The labor law requires employers to obtain the approval of the Ministry of Human Resources and Social Development to employ expatriates.
- Work and Residence Permits: Expatriate employees must have valid work permits and residence visas.
- Written Employment Contract: Saudi law requires non-Saudi workers to have a written employment contract for a specified period.
- Freedom of Occupational Mobility: An expatriate worker is allowed to move to a new employer freely after the expiry of his employment contract, or even during the validity of the contract after spending one year in the Kingdom and providing a 90-day prior notice, or according to other specific conditions during the first year.
7. Modern Labor Law Reforms:
The Kingdom of Saudi Arabia has recently witnessed some important reforms in the labor law, aimed at modernizing the legal framework and enhancing the attractiveness of the labor market. Among the most important of these reforms:
- The possibility for employees to leave their jobs without the employer’s approval upon the expiry of their contracts.
- The possibility for employees to leave their jobs during the contract period after spending one year in the Kingdom and providing prior notice.
- Facilitating job change procedures during the first year according to specific conditions. Note: The executive regulations of the Labor Law and its annexes are available in the attached links below for complete details.