Understanding Employment Laws in the Kingdom of Saudi Arabia

The employment law is in charge of regulating the relations between the employer and the employee, and in the King of Saudi Arabia (KSA), the labour law is the Royal Decree Number m/51 23 Sha’ban 1426/September 27 2005 which was amended by the Royal Decree number m/46 of 05/05/1436H. 

The Royal Decree Number m/51 23 Sha’ban 1426/27

The provisions of this Law apply to:

• Any agreement where a person commits himself to work for an employer under his management for a salary;
• Labours of the government and public organizations;
• Labours of charitable institutions;
• Labours of agricultural and pastoral firms that employ ten or more workers;
• Part-time workers concerning safety, occupational health, and work injuries.

According to this Law, the employer and the employee must be familiar with the labour law provisions. Any employer who employs ten (10) or more employees must submit to the Ministry a work organization regulation including internal work provisions, within a year of the effective date of this Law or from the date or reaching the quota. Nevertheless, as we mentioned at the beginning of this article, this Law was amended by the Royal Decree number m/46 of 05/05/1436H. 

 

The Royal Decree number m/46 of 05/05/1436H 

With the new labour law, the probationary period can be extended up to 180 days. Nevertheless, an employee may not be placed on trial more than once by the same employer. In case of geographic relocation, it is mandatory the written consent of the employee. Related to notice periods, there are two cases:

• Open-ended contracts: the employees under this type of contract are subject to sixty (60) days’ termination notice.
• Other term contracts: the employees will be subject to a minimum of thirty (30) days’ termination notice

If the employer and the employee agree before and in writing about the sum of compensation payable upon termination without “lawful reason”, the party ending the contract will have to compensate the other with either:

• A salary is equivalent to 15 days for each completed year of employment in open-ended contracts.
• The balance of wages for the remaining employment term, in the fixed-term contract.
• In both cases, the minimum sum of compensation may not be less than two months’ salaries.

 

Furthermore, the employers can terminate the employee’s contract without compensation when the worker is absent from work without any adequate reason for more than thirty (30) non-consecutive days per year or more than fifteen (15) consecutive days within a year. 

In case of thirty days of absence (non-consecutive), the employer must deliver to the employee a written warning after twenty (20) days of non-consecutive absence, and in case of fifteen (15) days consecutive of absence, the written warning must be delivered after ten (10) days of consecutive absence. One important thing about this amendment is that fixed-term contracts are renewed more than three (3) times, and will automatically translate into indefinite-term contracts. On the other hand, leaving employees has the right to demand upon termination a service record setting out their employment details and raise issues legally, but it will not be possible to give negative references. In this new Law, several modifications increasing short-term leave have been announced:

• Maternity leaves: female employees are entitled to ten (10) weeks of maternity leave fully paid, and it is possible to extend it for one month more, but it will be unpaid.
• Paternity leaves: this leave passed from one (1) to three (3) days.
• Marriage and mourning leave: before it was three (3) days, the New Law is five (5) days for marriage and mourning leave.

 

Concerning the training requirements, a Company with more than fifty (50) workers is mandatory to give training to at least 12% of its total number of Saudi Arabian workers, and the employer shall be able to make available documentary evidence of the training. 

Additionally, the working hours of the employees have been increased from eleven (11) to twelve (12) hours, but the employees cannot work for more than (5) five consecutive hours. In case of work injuries, companies shall give financial aid to employees temporarily incapable of labour due to damages suffered at work at the rate of 75% of the employees’ salary. In the event of non-recuperation, the company will require to compensate the employee for such injury. Recently, with the covid situation, there have been several labour and employment law developments in KSA, one of them was the Ministerial Resolution 13//1441 amending the KSA implementing regulation to the labour law. 

 

The Ministerial Resolution 13//1441 amending the KSA implementing regulation to the labour law 

The ministerial Resolution was issued on April 6th, 2020, and added a new clause that provides the following: 

a) In the event the KSA assumes measures as recommended by WHO to provide for regulated working hours or to keep away from a situation falling under Article 74 (5) of the Labour Law, which supplies for termination of employment because of force majeure, an employer will be able to agree on any of the following actions with an employee for a six (6) month period following the institution of such measures:

• Reducing the worker’s wage in correspondence with a decrease in the employee’s working hours;
• Putting the worker on annual leave as part of his yearly leave right;
• Putting the worker on exceptional leave following Article 116 (unpaid leave) of the Labour Law;
• Termination of employment following such measures’ application will not be justified if the employer received support from any government programs during this period;
• Nil in this Resolution prevents or inhibits the employee’s right to finish his employment contract.

b) Furthermore, the Ministry of Human Resources and Social Development of KSA has determined the following: fourteen (14) days’ paid leave shall be fixed for employees in categories that are recognized as high risk of COVID-19, workers outside of KSA due to the interruption of commercial flights are regarded as being on certified leave over and above the minimum under the Labour Law and workers in quarantine are on official leave over and above that under the Law.