Some of the key changes to be aware of include:
- Employment contracts for foreigners: Where a contract is for an indefinite term, the duration of the contract will be deemed one year from the date on which the employee starts work. It will automatically renew for the same period if the employee continues to work.
- Accommodation and housing: It will become a statutory obligation to provide accommodation and transport to employees (or a cash allowance towards). At the moment, many employers already provide such benefits as standard practice, but this will become law once the changes come into effect.
- Probation period: The parties will be able to agree a probation period of up to 180 days (versus the current 90 days, which can only be extended by mutual agreement).
- Notice period: A Saudi national will be able to terminate an indefinite term contract with 30 days’ notice (versus the current 60 days’ notice). The notice period for employers will still be 60 days.
- Termination: Resignation will become a lawful ground for termination and rules on managing resignations will be prescribed under statute. Bankruptcy has been added as a lawful reason for termination of an employee’s contract too.
- Overtime: The parties will be able to agree time off in lieu instead of overtime pay for any approved overtime.
- Right to appeal: Employees will be able to appeal internally against disciplinary action within 30 days and then appeal to labour court if an employer rejects or does not acknowledge the objection.
- Family-related leave: Maternity leave will be increased from 10 weeks to 12 weeks. Fathers will have 7 days following childbirth to take their 3 days’ paternity leave (whereas currently there is no statutory time limit on when they have to take it). Employees can now also take a three-day paid leave in the event of the death of a brother or sister.
- Discrimination: Employers must protect employees and applicants from discrimination on the basis of relevant characteristics.
- Training: A policy must be developed and implemented for enhancing Saudi nationals’ skillsets, with further details to follow.
- Fines: The Government will introduce fines of between SAR 200,000 – SAR 500,000 (USD 53,320.00 – USD 133,300.00) to be issued where entities are providing manpower services without a proper licence or are bringing non-Saudi nationals into Saudi Arabia without proper work authorisations.
What does that mean for employers and what should they do now?
To prepare for the upcoming changes, employers should review and update existing employment contracts, policies and HR processes for compliance with the new labour laws. If you require support, please get in touch with a member of the MDR ONE team.
