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Article Details

What you need to know about your contract

by Expatguru - 06/25/2014

"This article deals with certain important and fundamental issues with employment contracts in the kingdom and gives information on what you need to know before signing on the dotted line."

This column has emphasized in the past the importance of your employment contract. Every single sentence in your contract is important, because in the event of a dispute at a later date, what you have agreed to in writing is what matters – not any kind of verbal assurances.

In the past, there used to be two types of employment contracts – a definite period contract and an indefinite one. The term “indefinite” means that either there was no contract in the first place or the employer and employee have mutually agreed to keep extending the working relationship with no definite end date. As per the new Saudi Labor Law, indefinite contracts are no longer valid. So how does this affect you?

To begin with, any definite period contract is, as the name implies, for a fixed duration. What this means is that both the signatories of this contract must abide by their commitments – the employer MUST keep you hired for the duration of the contract and the employee MUST work with the employer for the same period. There are however certain riders.

The very first definite period contract between the employer and the employee, also known as the ‘mother’ contract makes it very clear that your employer cannot fire you before the end of the contract. If he does, he needs to pay you the balance amount due to you until the end of the contract period for what you would have earned, had you been in employment. The only exceptions are when the employee is fired for indiscipline or does something against the laws of the kingdom.

Similarly, if you quit before the end of your mother contract, you will have to pay your employer for all expenses he had incurred to bring you into the kingdom. This particular issue though, has been a point of contention for those who have signed a contract and due to whatsoever reason, are compelled to leave before the end of the contract period.

The situation completely changes once you have completed the initial period of the mother contract, which is usually two years unless explicitly stated in writing. Beyond the initial contract, the employer as well as the employee can terminate the employment by simply giving 30 days’ notice in writing to the other party. What happens is that the initial contract, when renewed, would now be treated as an “extension” of the new contract irrespective of whether the terms and conditions have changed in the extended contract. Note also that the End of Service benefits would be given based on the completed number of years and not part thereof.

Read your contract several times and get all your doubts clarified in writing with your potential employer before signing anywhere. Your contract is the all-important document which would define your employment in the kingdom.


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