Employment Contract in Saudi Arabia

Employment Contract

A written employment contract signed by the employer and an expatriate employee is compulsory, specifying a fixed duration, usually two years.

The contact shall be in Arabic. However, if it is in another language along with Arabic, in case of dispute, the Arabic text shall prevail.

The contract shall include the name and address of the employer and the employee, job title, location of work, duration of contract, probation period, wage agreed upon, provision of free food or food allowance and accommodation, working hours, overtime allowance, vacation, air passages, medical insurance, end of the service benefits, provision in regard to disposal or transportation of mortal remains to India in case of demise of the employee, mode of settlement of disputes, etc: Working Hours and Overtime As per Saudi Labor Law

Probation Period

Probation period, if provided in the employment contract, is usually not exceeding 90 days. It may, however, be extended to up to 180 days with the written agreement of the parties.

During probation either party may terminate the agreement without payment of compensation or end of service benefits, though the cost of the return journey is to be borne by the worker.

Renewal of employment contract

As per the Saudi Labor law, a fixed term contract shall terminate upon expiry of its term and the sponsor must repatriate the worker.

1-If both parties continue to implement the contract, it shall be deemed renewed for an indefinite period subject to the provision that a non-Saudi contract which has no specific duration, the duration of the work permit shall be duration of the contract.

2-If the fixed-term contract incorporates a clause providing for its renewal for a similar term or a specified term, the contract shall be renewed for the period agreed upon.

3-If a fixed term contract is renewed for two consecutive terms or if the original contract term and the renewal period amount to three years, whichever is less, and the two parties continue to implement it, the contract shall become an indefinite term contract.

4-In case the worker wishes to return home on expiry of the existing contract, notice of his intention to leave the employment may be given in 30 days (in fixed term contract)/60 days (in indefinite term contract) before expiry of the contract.