Labor Culture

In accordance with Article (6) of the Implementing Regulations of the Saudi Labor Law, the employer may not withhold the passport, residence or medical insurance card of the non- Saudi workers.

To improve the contractual relationship between the worker and employer, to ensure the workers’ rights, and to ensure that the wages are paid as agreed upon in the employment contract.

A program launched by the Ministry of Human Resources and Social Development in 2013, that enables the establishments to submit the wage files of their workers, monitors the rates of commitment and violations, and addresses justifications. The system targets all private sector establishments and is applied gradually to them according to specific stages.

• A- Daily-paid workers: Their wages are paid at least once a week.

B- Monthly- paid workers: Their wages shall be paid once a month.

C- If the work is done by the piecework and requires a period of more than two weeks, the employee shall receive a payment each week commensurate with the completed portion of the work. The balance of the wage shall be paid in full during the week following delivery of the work.

D- In other cases, the wages shall be paid to the worker at least once a week.

• Basic Wage: All that is given to a worker for his/her work by virtue of a written or unwritten employment contract regardless of the kind of wage or its method of payment, in addition to periodic increments.
• Actual Wage: The basic wage plus all other due increments decided for a worker for the effort the worker exerts at work or for risks he encounters in the course of performing his/her work, or those decided for the worker for the work under the employment contract or work organization regulation. It includes:

1. The commission or percentage from sales or profits paid against what the worker markets, produces, collects, or the increased or enhanced production.
2. Allowances the worker is entitled to for exerted effort or risks he encounters while performing his/her job.
3. Increments that may be granted in accordance with the standard of living or to meet family expenses.
4. Grants or Rewards: Payments made by the employer to a worker for honesty or efficiency and the like, if such grant or reward is stipulated in the employment contract or the work organization regulation of the firm, or if it is customarily granted to the extent that workers consider it part of the wage rather than a donation.
5. In rem privileges: What the employer commits itself to provide to the worker for his/her work by stating the same in the employment contract or the work organization regulation, and it is estimated at maximum of two months basic wage per annum, unless it is otherwise estimated to exceed that in the employment contract or the work organization regulation.

• No provisions included in the Law, deeming the restructure or the financial conditions of the establishment itself to be among the cases, in which the contract is terminated, unless the contract is terminated in accordance with any of the other cases mentioned in Article (74) of the Saudi Labor Law, or is terminated by either party under Articles (80) and (81), as the case may be. If the termination is not made in accordance with any of the above-mentioned articles, the party affected by termination shall be entitled to compensation for the termination of the contract for illegal reason.
• In accordance with Article (77) of the Saudi Labor Law, stipulating that unless the contract includes specific compensation for the termination by either party for an invalid reason, the party affected by termination shall be entitled to compensation as follows:

1. For non-fixed term contracts: an amount equivalent to fifteen-day wage for each year of the worker’s employment.
2. For fixed-term contracts: the wage for the remainder of the contract term.
3. The compensation referred to in paragraphs (1) and (2) of this Article shall not be less than the worker’s wage for two months. Furthermore, the worker is entitled to end of service reward in accordance with Article (84) and to a wage for the unused leaves in accordance with Article (111) of the Saudi Labor Law.

Expressing the desire not to renew the contract may not be deemed a resignation. It is a right guaranteed to both parties. If the employment contract stipulates that a notice of desire not to renew shall be served a specified period before the end of the contract, the notice shall then be served. Otherwise, if the party, who desire not to renew, violates such specified period to notify the other party, the affected party is entitled to adhere to renew the contract.

The fixed-term contract may be terminated in the following cases:

1- If both parties agree to terminate it, provided that the worker’s consent is in writing.

2- If the term specified in the contract expires, without having the contract been explicitly renewed in accordance with the provisions of this Law, the contract shall remain valid until the expiry of its term.

4- When the worker reaches the age of retirement.

5-Force majeure.

6- Permanent closure of the firm.

7- Termination of the line of business for which the worker is employed, unless agreed otherwise.

8-Any other case provided for by any other law.

If the termination is not made in accordance with any of the above-mentioned Articles, the termination is deemed invalid. Therefore, the party affected by termination shall be entitled to compensation for the termination of the fixed- term contract before its expiry for illegal reason.

The purpose of the service is to preserve the rights of the relevant parties (employer and employee), to provide a work environment that helps the employees stability and raise their productivity, to ensure that the establishments comply with the laws and provisions of the Labor Law, to verify the validity of contract data, and to reduce the labor disputes and claims.

Link of Qiwa for Contract Authentication: https://www.qiwa.sa/ar/qiwa-services

Pursuant to Article (51) of the Labor Law: The employment contract shall be executed in duplicate, one copy to be retained by each party. However, a contract shall be deemed to exist even if not written. In this case, the worker alone may establish the contract and his entitlements arising therefrom by all methods of proof. Either party may, at any time, require to write the contract. As for workers of the government and public corporations, the appointment decision or order issued by the competent authority shall serve as the contract.