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Article Details

Amendments to Saudi Labor Law

by Expatguru - 10/31/2015

"This article gives an overview of the important changes made to the Saudi Labor Law which came into effect from October, 2015."

The Saudi labor law has now been amended and came into force from October 24, 2015. After the previous amendment in 2006, some major changes have been made. While some changes are only for Saudi employees, those which are relevant for expats are highlighted below.

Labor contracts in Saudi Arabia typically have a fixed tenure – 2 years in most cases. However, some of the contracts previously entered into between the employer and the employee were open-ended without any tenure. The latest amendment has increased the notice period in case of termination of open-ended contracts from 30 to 60 days on either side. In case of fixed tenure contracts, it is now 30 days on either side.

In case of termination of contract by either side, the compensation as per the new labor law is 15 days’ pay for each year of service in case of open-ended contracts and the salary for the balance part of the contract subject to a minimum of two months’ pay.

In case an employer terminates an employee’s contract and gives notice, the latter is now entitled to have a paid break of 8 hours/week to search for alternative employment.

Interestingly, leave entitlements have now significantly increased. Paternity leave is now 3 calendar days; compassionate leave and marriage leave are now five calendar days. There is no change for annual leave.

Expectant mothers can avail maternity leave not earlier than 4 weeks from the expected date of delivery, but the duration of the paid leave will not be more than 10 weeks. They are entitled to take an additional 4 weeks of unpaid leave.

A significant change in the new labor law is that employees cannot be transferred from one location to another without obtaining the latter’s concurrence. Only in case of emergencies, an employer can move an employee temporarily up to a maximum of 30 from his regular work place.

The probationary period of 90 days from the date of employment has now been increased to 6 months.

As per the new labor law, an employer has to mandatorily issue a service certificate to his employee upon termination of the contract. The employer has to just mention the date of joining, date of termination and job title, nothing more and nothing less. He is now explicitly prohibited by law from mentioning anything in the service certificate which could harm the employee’s reputation or affect his future prospects.

An employee can now be terminated without notice for unauthorized absence provided he stayed away from work for 30 days or 15 days consecutively. Finally, the days of paying employees by cash in an envelope are gone. All wages have to be paid mandatorily into bank accounts of employees.

These rules have now come into force and would supersede the previous labor law.


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