Saudi Arabia An Overview of the Labour Law

This brief article aims to provide some basic and general information about labour law and employment conditions in Saudi Arabia to help those foreign nationals intending to work in the Kingdom to gain an understanding of the legal and regulatory framework for employment relationships.

government in Saudi Arabia only and is valid for (6) months or (12) months from the first exit of the Kingdom or with a specified return date. This type of visa is issued to non-Saudi citizens who are living in the Kingdom of Saudi Arabia. Saudi Embassies and Consulates are not authorized to extend expired exit/re-entry visas without prior approval from the Ministry of Foreign Affairs and approval letter from the sponsor.

Employment contract
The contract for a non-Saudi worker should be written and should be for a limited period. If this is not mentioned in the contract, the period of the work permit is to be considered the contract period (Labour Law, art 37). The NLL requires the employment contract to be in Arabic. A bilingual contract, with the Arabic and English texts written in columnar fashion may be created for easy reference. However, in the event of a labour dispute before a Saudi court the Arabic text will prevail. As long as the contract of employment so specifies, a worker may be subject to a probation period of a maximum of three months. The time period should be included in a written contract of employment (Labour Law, art.53).

Saudi Labour Law
The Saudi Labour Law is the primary source of legal obligations for employers and employees. It was first introduced in 1969, and an updated version of the law came into force on 23 April 2006.

Work permit and Visa
Foreigners may not engage in any type of work in Saudi Arabia without a work permit issued by the Ministry of Labour. To obtain a work permit, an employment contract and local sponsorship are required. The foreign worker may sign the employment contract prior to coming to the Kingdom. The employer becomes the employee’s sponsor for immigration purposes. A medical examination is required to obtain a residency permit, and this examination is repeated upon arrival in the Kingdom. The employer must bear all expenses including residence and work permit fees and their renewal. Non-Saudi employees would require an exit or an exit and re-entry visa. An exit-only visa is issued to an employee intending to depart from the Kingdom upon the completion of an employment contract (for any reason including resignation and termination). An exit and re-entry visa is issued by the Saudi 1

Trade unions
Trade unions are illegal in Saudi Arabia and employees may negotiate their own working conditions.

Termination of Service
A contract of employment may be terminated, other than at the initiative of the employer, in the following instances: By agreement of the parties At the end of a definite term contract At the request of either party in the case of

2 . Disclaimer Aram Consulting’s communications are intended to provide commentary and general information. If the party who terminated the contract does not observe the above-mentioned period. LLM. LLB Mobile: +61 4 1812 2609 Email:amirk@aramconsulting. Direct settlement with the employer also allows the employee to avoid potential problems over obtaining the exit visa. that party will be obliged to pay the other party compensation equal to the wage of the worker for the period of notification or its remainder. for which only the employer can apply. or Force majeure If the employment contract is unlimited. either of the two parties has the right to terminate it in accordance with a legal reason which should stated in a notification addressed to the other party in writing before termination within a period not less than 30 days if the worker is paid on a monthly basis and not less than fifteen days for others. For these reasons. If this fails. contact: Dr Amir Kordvani PhD. For more information. They should not be relied upon as legal advice. and with correspondent offices throughout the Middle East.indefinite term At retirement (age sixty for men and fiftyfive for women). the employee’s only avenue of legal recourse is to make a complaint against their employer to the Labour Office (Claims Division). employment disputes are usually settled directly with the employer since recourse to the Labour Office can entail a lengthy and costly procedure. The last wage of the worker would be considered as basis for the estimation of the compensation for workers who receive their wages according to time criterion. Contractual disputes In Saudi Arabia. Formal legal advice should be sought in particular transactions or on matters of interest arising from this publication. employees who have disputes with their employing company are strongly advised to make an initial attempt to resolve their situation privately and cordially between themselves and their Aram Consulting is a consultancy firm in Brisbane Australia with an affiliate office in Tehran Iran.

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