In a world of rapid change and continuous development, the Saudi labor system stands out as a role model in striving to achieve a balance between market requirements and workers’ rights. This system, which is witnessing continuous updates, reflects the Kingdom’s ambitious vision of transforming into a diversified and sustainable economy and enhances its position as an attractive destination for investment and work. Therefore, in this article, we will shed light on the most prominent features of the labor system in the Kingdom of Saudi Arabia, the most important amendments that have been implemented recently, and how these changes can contribute to building a developed and prosperous work environment that meets the aspirations of current and future generations, so follow along with us.
What is the Saudi labor system?
It is a set of legislation that aims to regulate employment processes in the Kingdom of Saudi Arabia, whether for Saudis or non-Saudis, and addresses many aspects related to labor relations, from recruitment, training, and qualification to the terms and conditions of work and the prevention of work risks, major accidents, and injuries. In addition to health and social services and settling labor disputes,.
When was this system issued?
The first labor system was issued on Ramadan 6, 1389 AH, under the name “Labour and Workers System,” and it continued to be implemented until a new system was issued on Shaaban 2, 1426 AH. It is worth noting that this new system witnessed comprehensive updates and important amendments, including adding some categories of workers that were not included in the previous system. Among the notable amendments in the new system are:
Expatriate worker’s employment contract: It has become necessary for the employment contract to be written and for a specific period.
Financial costs: The employer was obligated to bear the fees for recruitment, residence, and the work permit and its renewal, which reduces the financial burden on expatriate workers.
Employment of the disabled: raising the employment rate of the disabled to 4%, enhances job opportunities for this category and encourages their integration into the labor market.
What are the types of employment contracts in the Kingdom of Saudi Arabia?
The types of contracts vary in the Saudi labor system and include the following:
Seasonal employment contract
It is used for work that is repeated in certain seasons, such as agricultural or tourism work. The duration of the contract is determined based on the specific season, and the contract ends at the end of the season. It is worth noting that this type of contract provides a practical solution for employing workers during seasonal periods of congestion without committing to long-term contracts.
indefinite contract
It is a type of contract concluded with Saudi employees only and is characterized by not having a specific expiration period. Therefore, this means that the contract continues indefinitely without the need to renew it. It is worth noting that both parties—the employer and the employee—have the right to terminate the contract provided that the other party is notified in advance, which provides flexibility in terminating the labor relationship when circumstances change.
Temporary employment contract
It is a contract in the Saudi labor system that specifies a specific period or a specific task to be completed. The contract ends automatically at the end of the period or the completion of the specific task. It is worth noting that the duration of the temporary work contract must not exceed 90 days, and it can be renewed based on an agreement between the two parties.
This type of contract is suitable for work that requires temporary efforts or for specific tasks that need to be completed in a short time.
Part-time employment contract
It is a contract concluded between the employer and a part-time employee to perform work for several hours that are less than half the usual daily working hours. This work could be done daily or on certain days of the week. It is worth noting that this contract provides flexibility for employees who are looking for a balance between work and personal life and also allows the employer to obtain the necessary labor without having to commit to full-time employment.
Casual employment contract
It is a contract concluded to carry out a task or work that is not part of the usual activity of the workplace. This contract is characterized by not exceeding 90 days. It is usually used when the employer needs to carry out unusual or additional work that does not fall within the daily activity of the organization, which allows flexibility in dealing with emergency circumstances or temporary work.
Maritime employment contract
It is an employment contract concluded between the owner or supplier of a ship, or their agent, and a sailor to work on board the ship. The contract includes details, such as:
- Supplier name.
- Signing date.
- Sailor’s name.
- His nickname.
- His nationality.
- The type of work assigned.
- How to perform it.
- Duration of the contract.
- The reward.
- The certificate that allows a sailor to work in maritime navigation.
This contract guarantees that labor relations in the maritime sector are clearly and precisely regulated.
Training and qualification contract
It is a written contract in which the employer commits to training and qualifying a person to become qualified for a specific profession. The contract specifies the type of profession, the duration of training, the various stages, and the reward that the trainee receives at each stage. It is worth noting that the reward is not determined based on the piece or production, but rather a fixed reward is provided.
This contract helps prepare the professional cadres needed for the market through practical and systematic training.
How is an employment contract done in Saudi Arabia?
In the Kingdom of Saudi Arabia, concluding an employment contract is subject to specific controls that guarantee the rights and duties of both the employer and the worker, as the Ministry of Human Resources and Social Development has specified a unified model for the employment contract that must include a set of basic information, by Article 52 of the Saudi Labor Law:
- Name and location of the employer: It must include the name of the employer and its place of work, which identifies the entity responsible for employment.
- The worker’s nationality and personal information: The worker’s name, nationality, and everything necessary to prove his identity must be present, such as his national ID number or residence.
- Agreed wage: The agreed wage must be stated, including benefits and allowances, which reduces the possibility of future disputes.
- Type of work, place, and date of joining: The type of work that the worker will do, the place of performance, and the date of his joining the work must be specified.
- Contract duration: If the contract is for a fixed term, especially for non-Saudis, the contract duration must be clearly defined.
Notice
Both parties to the contract have the right to add other clauses that do not conflict with the provisions of the law, its regulations, or the decisions issued in implementation thereof. These additional clauses may relate to topics such as notice periods, termination conditions, internal policies, or any additional obligations agreed upon by the two parties. The system also stipulates that the employment contract must be written in two copies, with each party keeping a copy.
Work conditions for Saudis and non-Saudis
The Kingdom of Saudi Arabia sets clear laws and conditions to regulate the labor market for both Saudis and non-Saudis. These conditions aim to guarantee workers’ rights and meet the requirements of the local labor market. It is worth noting that they include many common points, in addition to additional conditions for non-Saudi workers as follows:
Common conditions
- Minimum age for work: men must be at least 21 years old, and women must be at least 22 years old.
- Persons over the age of 15 are permitted to be employed by the terms of Chapter Ten of the law.
- Medical examination: The worker must undergo a medical examination at an approved institution to ensure that he is qualified to work.
- Qualifications: The worker’s academic or practical qualifications must match the requirements of the vacant position.
- Good conduct: A certificate must be submitted stating the good conduct of the applicant for the job.
- Islamic dress: The law requires working women to wear Islamic dress in official workplaces.
Conditions for Saudis
- Employment contract: A Saudi worker can conclude an unlimited-term contract.
Special conditions for non-Saudis
job contract
The non-Saudi worker’s contract must be for a fixed term, with the possibility of expiration, renewal, or conversion to an indefinite-term contract in certain cases.
Additional procedures and documents
- The Ministry’s approval to bring in the worker.
- Work permit.
- A passport valid for at least 6 months.
Professional competencies
The non-Saudi worker must have the professional competencies that the country needs, and there are no Saudis who possess them, or the number of them present does not meet the need, or he must be among the category of ordinary workers that the country needs (according to Article 33 of the Saudi Labor Law).
Documentation of the employment contract
The Saudi Labor Law obligates the employer to document employee contracts to preserve the rights of both parties. The employer bears responsibility if he does not document the contract, and the worker has the right to transfer to another employer if the employer refuses to document his contract. It is worth noting that the Ministry of Human Resources and Social Development provides the service of documenting electronic contracts through platforms such as “Madad” and “Qawi.”
business license
The Saudi Labor Law does not allow the recruitment of foreign workers except after the Ministry’s approval and obtaining a work permit according to its form. It is worth noting that the conditions for obtaining a work permit include:
- The worker enters the country legally and is authorized to work.
- He must have the professional qualifications or academic qualifications that the country needs.
- Contracting with an employer and under his responsibility.
Probation period in the Saudi labor system
It is a period agreed upon between the worker and the employer during which either party can terminate the contract without notice unless the contract stipulates otherwise. It is worth noting that the trial period is not mandatory, but if it is specified, it must be explicitly stated in the contract. The trial period must not exceed 90 days, and it can be extended by written agreement between the two parties to 180 days.
The importance of using the Qoyod accounting program by the Saudi labor system
In today’s business world, accounting programs have become an urgent necessity for any company seeking to improve its efficiency and simplify its financial operations, and among these programs comes “Qoyod” as one of the leading accounting solutions, which is fully compatible with the Saudi business system for the following reasons:
Compatibility with the Saudi labor system
One of the most prominent advantages of the Qoyod program is its complete compatibility with Saudi labor law and financial regulations in the Kingdom. This compatibility ensures that all accounting processes are in line with local laws, which reduces the risk of exposure to penalties and financial fines as a result of any regulatory violation.
Facilitating financial and administrative operations
Qoyod provides many tools that facilitate the management of financial and administrative processes, including:
- Invoice Management: Invoices are easy to issue and track, ensuring accuracy and speed in collections.
- Financial Reports: Provides accurate and detailed financial reports that help in making administrative and strategic decisions.
- Inventory management allows accurate tracking of inventory, which helps reduce waste and increase profitability.
Improve efficiency and productivity.
By using the Qoyod program, companies can reduce the time and effort spent on manual accounting processes, as it provides an integrated environment that enables employees to focus on the most important and strategic tasks, which increases the company’s overall productivity.
Conclusion
The Saudi labor system represents the cornerstone of supporting the national economy and achieving sustainable development, and through modern amendments and precise regulatory regulations, this system emerges as a pivotal factor in enhancing the work environment, ensuring workers’ rights, and encouraging investment. It is worth noting that as efforts continue to improve and modernize the system in line with Vision 2030 AD, we can look forward to a bright future that enhances the Kingdom’s position as a preferred destination for talent and business alike, and do not forget that the government’s commitment to achieving a fair balance between the rights of workers and employers is an important step towards achieving a prosperous and inclusive economy.
It is worth noting that the Qoyod platform is the best accounting program that is compatible with the Saudi business system and offers all its customers the point of sale system, as well as the electronic invoice, etc., at unparalleled prices.
After learning what the Saudi labor system is, try Qoyod now for free for 14 days and enjoy the best accounting software compatible with this system.
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