The Saudi Council of Ministers recently gave the nod to significant changes in the Labor Law, all aimed at creating a more attractive work environment and supporting the sustainable development goals outlined in Saudi Vision 2030. These amendments, announced by the Ministry of Human Resources and Social Development (the “Ministry”), have far-reaching implications for both employees and employers. Let's break it down:
These amendments affect a total of 38 articles within the Labor Law, with seven articles removed and two new ones introduced. These changes are part of Saudi Arabia's broader strategy to enhance the employment market and align with international labor standards. The clock is ticking: these updates will take effect 180 days after their publication in the official Gazette.
OBJECTIVES:
- Improving the Labor Market: The amendments aim to enhance the overall labor market in Saudi Arabia.
- Job Stability: Workers can expect better job stability.
- Rights Protection: Both employees and employers will benefit from strengthened rights protection.
- Workforce Development: The nation's workforce will receive TLC through improved training opportunities. Skill-building.
- Boosting Opportunities for Saudi Citizens: The changes are designed to increase job opportunities for Saudi citizens.
COMPREHENSIVE BREAKDOWN OF THE CHANGES:
Now, let's peek behind the legal curtain and see what's changed:
- Trainee Rights and Duties: Clear guidelines have been introduced for trainees and employers during training periods. A new provision was added to Article 46 of the Labor Law, allowing employers to conduct qualification and training either at their own facility or at another location and to include this in the trainee's employment contract.
- Extended Maternity Leave: Female workers now enjoy a maternity leave of twelve weeks. A little extra time to bond with the tiny human.
- Overtime Compensation Flexibility: Workers can choose paid leave instead of additional overtime compensation. Time off or extra cash? Decisions, decisions!
- Contract Renewal Mechanism: The process for renewing contracts for non-Saudi workers is specified. The employment contract of a non-Saudi must be written and for a limited period. If the contract is devoid of a statement of its duration, its duration is considered one year from the date of the employee's actual commencement, and if the work continues after the expiration of this period, it is considered renewed for a similar period. (New amendment to article 37).
- Outsourcing: Introducing a new provision for the deployment of employees to work for entities other than the primary employer, through a facility licensed for this purpose.
- Probation Period: The maximum probation period is set at 180 days. It's like a trial run, but with a legal stopwatch. The new amendments give each party the right to terminate the contract during this period, which makes it not permissible to agree to grant this right to one of them without the other.
- Compassionate Leave: Workers are entitled to three days of paid leave in the event of the death of a spouse or close relative.
- Equal Treatment: Employers are now explicitly required to avoid actions that undermine equal treatment in professional matters.
- Definitions and Procedures: Clear definitions
for “resignation” and “assignment” are now
part of the law:
- The submitted resignation request will be deemed accepted if 30 days pass without a response from the employer. If necessary for the interests of the work, the employer may delay accepting the resignation for no more than 60 days, provided a written, reasoned explanation is given to the employee. The postponement must be decided before the initial 30-day period expires.
- The postponement period is calculated from the date the explanation is provided to the employee.
- The employment contract terminates upon the employer's acceptance of the resignation, after 30 days without a response from the employer, or at the end of the postponement period.
- The employee may retract the resignation request within seven days of submission unless the employer has already accepted it before the employee's departure.
- It is not allowed to set a future resignation date during the period in which the resignation request is under consideration.
- Bankruptcy-Related Termination: A provision for contract termination related to bankruptcy proceedings has been introduced. When the company's ship is sinking, there's an exit plan.
- Notice period for contract termination: Amending the notice period for terminating a fixed-term contract to 30 days if initiated by the employee and 60 days if initiated by the employer.
- The Ministry - for considerations it deems appropriate - may refrain from renewing work permits if the employer violates the standards concerning the localization of jobs established by the Ministry, and any of the other requirements or controls contained in regulations. The regulations specify the procedures to ensure that the employee is not affected by the non-renewal of the work permit, including the possibility of transferring the employee's service to another employer without the approval of the violating employer. (New amendment to article 35).
- The new amendments mandate that the employer must provide written notification to the employee regarding any imposed penalty. If the employee is absent or refuses to accept the notice, it should be sent via registered mail to the address on file. The amendments also permit the employee to submit a written grievance to the employer's competent authority within thirty (30) days of receiving the penalty notice. If the grievance is either rejected or not addressed within fifteen days, the employee may challenge the decision in labor court within thirty (30) days from the date the grievance was rejected or the deadline for deciding it expired, whichever comes first.
Remember, these changes are all about creating a fair and supportive work environment. So, whether you're an expat, a Saudi citizen, or an employer, you must stay informed about your rights and responsibilities under the updated Labor Law.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
