Employment Contract as per Saudi Labor Law
An employment contract is a signed agreement between an individual employee and an employer. It establishes both the rights and responsibilities of the two parties.
- The employment contract must be executed in duplicate, with one copy per party.
- The employment contract must be of a fixed term (for a non-Saudi), and if it is not specified, then the work permit is the term of the contract.
- The contract is valid even if it is not written. In this case, the worker alone may prove the contract and the rights resulting from it by all means of proof. Each party may request the writing of the contract at any time. As for the government and public institutions’ workers, the appointment decision issued by the competent authority will be considered “in loco” contract.
The employment contract must be under the standard form of the employment contract formulated by the Ministry. The parties may add other provisions that do not contradict the provisions of the Labor Law or its regulations, and issued executive decisions.
An employment contract must contain:
1- Name and place of the employer
2- Residence Address
3- Documents necessary to prove the worker’s identity
4- Name and nationality of the worker
5- Agreed wages, benefits and allowances
6- Type and place of work
7- Date of Joining
If the worker is subject to a probationary period, the employment contract will expressly state and clearly specify that the worker be under probation, so that it does not exceed ninety days. A written agreement between the worker and the employer may extend the probationary period, if it does not exceed one hundred and eighty days. Eid al-Fitr, Eid al-Adha and sick leave are not included in the probationary period. Each of the parties has the right to terminate the contract during this period unless the contract contains a text that gives one of them the right to terminate the contract.
A worker will not be employed under probation more than once by one employer. Excluded from hereto, by a written agreement between the contract parties, the worker may be subjected to another probationary period provided that. If the contract expires during the Probationary period, both parties do not deserve compensation, and the worker does not deserve an end-of-service pay.
RENEWAL OF EMPLOYMENT CONTRACT
A fixed-term employment contract will terminate at its term. If both parties continue to enforce the contract, it will be considered renewed for an unspecified period. (Taking into account Article 37 of the Labor Law as regards non-Saudis)
If the fixed-term contract includes a provision to renew it for a similar period or for a specified period, it is renewed for the agreed-upon period. Suppose the renewal is repeated three consecutive times, or the original contract term with the renewal period reaches four years, whichever is less, and both parties continue to implement it. In that case, the contract will be converted into an unspecified period contract.
- Performing and perfecting work
- Obeying Superiors
- Respecting Laws and Regulations
- Nondisclosure of job secrets
- Respect for working times