Saudi Labour Law Adjustments - Is Your Business Affected?

The Ministry of Labour for the Kingdom of Saudi Arabia has recently announced a total of 38 amendments to the country’s Labour Law which came into effect in October 2015.

The full text of the amendments makes for a considerable read. However, the activpayroll team has identified the 10 most important things that you - as an employer or employee - need to know about today: 

 

1.    Employers must issue new employment contracts to their employees in the Ministry of Labour prescribed standard employment contract formats.

Employers can add additional terms and conditions to the standard contract templates, as long as the additional terms do not contradict with those laid out in the Labour Law.

Amending employment contract templates will be a quite significant and time consuming process for many employers. Employees should carefully review any new contracts that they are asked to sign.

 

2.    The standard probationary period is still 90 days. However, with the mutual consent of the employer and employee, the probationary period can be extended by up to 90 days. Employers should be diligent extending the probationary period since any extension requires the written consent of the employee.

 

3.    Fixed-term contracts can now be renewed up to three times or by total renewal periods of 4 years, whichever is less, before the fixed term-term contracts automatically become indefinite term contracts.

 

4.    Employers can transfer employees from one location to another without the employee's’ written consent for a maximum period of 30 days. The employer must cover all related costs, including transport or travel.

 

5.    Employers are not allowed to include any negative comments regarding their former employee’s performance in the “service certificates”.

 

6.    An indefinite term employment contract can be terminated with a 60-day advance notification if the employee is paid monthly and with a 15-day advance notification for all other employees.

 

7.    Employment contracts may be terminated if an employee is absent from work, without a prior approval for more than 30 days during any service year (a written warning letter must be issued after 20 days) or 15 consecutive days (a written warning letter must be issued after 10 days).

 

8.    Bereavement and marriage leaves have been extended to 5 days.

 

9.    Childbirth leave has been extended by 3 days.

 

10.    Female employees can extend their maternity leave by a month after their initial 10-week maternity leave period.