Recent Amendments to the Kingdom of Saudi Arabia Labour Law: A Comprehensive Overview
Sultan Al-Hejailan, Hassan Aslam Shad, Shahd Alnogedan and Saad Al-Qahtani
The Labour Law of the Kingdom of Saudi Arabia was initially enacted by Royal Decree (M/51) on 23/08/1426 H (corresponding to 27/09/2005 G), which has served as the cornerstone of labour laws in the Kingdom. In a significant move to modernize and enhance the labour framework, recent amendments to the KSA Labour Law were proposed on 02/02/1446 H (06/08/2024 G) which entered into force on 19 February 2025. While the Implementing Regulations are yet to be released, the proposed changes introduce a host of transformative updates aimed at refining employment practices, expanding worker protections, and aligning the labour market with contemporary economic and social needs. The amendments specifically expand the employer's responsibilities towards employees, including the obligation to avoid actions that could undermine or weaken the application of equal opportunities or treatment in employment and professional settings. This includes preventing discrimination or favoritism among job applicants or employees based on race, color, gender, age, disability, marital status, or any other form of discrimination.
Key Highlights of the Amendments
The amendments to the KSA Labour Law encompass a wide array of changes, ranging from new definitions and expanded employer responsibilities to enhanced worker protections and updated regulations governing specific employment aspects. These changes are designed to address emerging labour market trends, including the need for greater clarity in employment contracts. Below, we delve into the most notable amendments and their implications for employers and employees alike.
1. Expanded Definitions and Clarity
One of the foundational changes introduced by the amendments is the inclusion of new definitions, which provide greater clarity and precision in interpreting labour regulations. For instance, the term "Attribution" is now defined as the service of providing a worker to work for a non-employer through a licensed establishment. Similarly, "Resignation" is explicitly defined as a worker’s written disclosure of their desire to terminate a fixed-term employment contract without coercion, subject to the employer’s acceptance. These definitions aim to eliminate ambiguities and ensure consistent application of the law across various employment scenarios. The inclusion of these definitions will eliminate the need for judicial interpretation of these terms.
2. Enhanced Saudization and Work Permit Regulations
The amendments reinforce the Kingdom’s commitment to Saudization, a policy aimed at increasing the employment of Saudi nationals in the private sector. Article 35, for example, grants the Ministry of Human Resources and Social Development the authority to hold the renewal of work permits of the foreign employees if employers fail to meet Saudization criteria or other conditions outlined in the Regulations. Importantly, the amendment introduces provisions in the Implementing Regulations to protect workers affected by non-renewal of work permits, including the possibility of transferring their services to another employer without the consent of the non-compliant employer. The Kingdom is adopting multiple strategies to encourage Saudization, aiming to increase the employment of Saudi citizens across various sectors, for example, the Ministry has undertaken the responsibility of establishing employment channels for every Saudi citizen of working age who seeks employment. These channels enable individuals to register their names and provide their qualifications and professional information. In addition to this, the Kingdom has developed a range of supportive programs to assist organizations that hire Saudi nationals. These programs offer financial support by covering a percentage of the employee's salary, as well as providing funding for training and development plans to enhance the skills of Saudi employees. Through these initiatives, the Kingdom is not only encouraging employment but also ensuring that the workforce is equipped with the necessary skills to thrive in the labor market. Also, these changes underscore the Ministry’s dual focus on enforcing Saudization while safeguarding worker rights.
3. Revised Employment Contract Provisions
The amendments introduce significant updates to the rules governing employment contracts, particularly for non-Saudi workers. Article 37 now stipulates that employment contracts for non-Saudis must be written and of a fixed term. If the contract does not specify a duration, it will be deemed valid for one year from the date the worker assumes their duties. Should the worker continue employment beyond this period, the contract will be automatically renewed for a similar term. This amendment also grants non-Saudi workers the right to prove the actual commencement of their employment through more means of proof than before, as well as provides greater certainty for both employers and employees, reducing the risk of disputes over contract duration.
Additionally, Article 51 mandates that employment contracts must be attested in accordance with relevant statutory provisions, ensuring their legal validity. This requirement underscores the importance of formalizing employment relationships and protecting the rights of both parties.
4. Strengthened Worker Protections
The amendments place a strong emphasis on enhancing worker protections, particularly in areas such as resignation, grievance procedures, and leave entitlements. A new provision under Article 79 regulates the resignation process, stating that a resignation application shall be considered accepted if the employer does not respond within 30 days. Employers may postpone acceptance for up to 60 days if justified by work requirements, provided they provide a written explanation to the worker. This amendment ensures that workers have a clear and fair process for resigning, while also allowing employers to manage workforce transitions effectively.
Furthermore, Article 72 introduces a more robust grievance mechanism for workers penalized by their employers. Workers may now file a written grievance within 30 days of being notified of a penalty. If the grievance is rejected or not addressed within 15 days, the worker may challenge the penalty decision before the labour court within 30 days from the date of the grievance or the end of the period specified for deciding on the grievance, whichever is sooner. This change empowers workers to seek redress and ensures that penalties are applied fairly and transparently.
5. Updated Leave Entitlements
The amendments also introduce updates to leave entitlements, reflecting the evolving needs of the workforce. Article 113, for instance, expands the scope of paid leave to include a three-day leave with full pay in the event of the death of a worker’s brother or sister. Additionally, leave for childbirth must now be taken within seven days of the delivery date, ensuring that workers can fully utilize their entitlements during critical life events.
Perhaps the most significant change in this regard is the extension of maternity leave under Article 151. Female workers are now entitled to 12 weeks of fully paid maternity leave, with the first six weeks following delivery being obligatory. The remaining six weeks may be divided at the worker’s discretion, and the leave may commence up to four weeks before the expected delivery date. This amendment represents a substantial improvement in maternity benefits, aligning Saudi Arabia with international standards and supporting the well-being of working mothers.
6. New Framework for Maritime Employment Contracts
Recognizing the unique nature of maritime employment, the amendments introduce a new framework for regulating employment contracts in this sector. While the Implementing Regulations are yet to provide detailed provisions and will be issued in association with Transport General Authority, this change reflects the Kingdom’s commitment to addressing the specific needs of diverse industries and ensuring comprehensive labour protections across all sectors.
7. Training and Qualification Requirements
The amendments also emphasize the importance of training and skill development for Saudi workers. Article 42 now requires employers to develop a structured policy to train and qualify Saudi employees, replacing the previous requirement to "prepare" workers. This shift signals a more intentional and strategic approach to workforce development, aimed at enhancing the technical, administrative, and vocational skills of Saudi nationals.
Similarly, Article 43 eliminates the previous requirement for employers with 50 or more workers to train at least 12% of their Saudi workforce annually. Instead, employers must now adhere to training quotas determined by the Minister’s decision, with the Regulations specifying the relevant criteria. This change provides greater flexibility while maintaining the focus on upskilling Saudi workers.
Implications for Employers and Employees
The recent amendments to the KSA Labour Law represent a significant step forward in modernizing the Kingdom’s labour market. For employers, these changes necessitate a thorough review of existing policies and practices to ensure compliance with the updated regulations. Key areas of focus include Saudization requirements, employment contract terms, and training programs for Saudi workers. Employers must also be prepared to adapt to new provisions governing resignation, grievance procedures, and leave entitlements, ensuring that worker rights are upheld.
For employees, the amendments offer enhanced protections and greater clarity in their employment relationships. The expanded definitions, robust grievance mechanisms, and improved leave entitlements provide workers with stronger safeguards and greater peace of mind. The extension of maternity leave, in particular, is a landmark change that underscores the Kingdom’s commitment to supporting working mothers and promoting gender equality in the workplace.
Conclusion
The proposed amendments to the KSA Labour Law mark a pivotal moment in the evolution of labour regulations in Saudi Arabia. By introducing new definitions, expanding employer responsibilities, and enhancing worker protections, these changes reflect the Kingdom’s dedication to creating a fair, transparent, and dynamic labour market. As the Implementing Regulations are released, further clarifications and details will emerge, providing additional guidance for employers and employees alike. In the meantime, stakeholders must proactively prepare for these changes, ensuring that they are well-positioned to navigate the evolving landscape of labour law in Saudi Arabia. With these amendments, the Kingdom continues its journey toward a more inclusive, equitable, and prosperous future for all.
Sultan Al-Hejailan heads the offices in Jeddah and Al-Khobar of the Law Firm of Salah Al-Hejailan (in association with Freshfields LLP). Email: [email protected]
Hassan Aslam Shad is Senior Legal Counsel at the Law Firm of Salah Al-Hejailan (in association with Freshfields LLP) and a graduate of Harvard Law School, U.S.A. Email: [email protected]
Shahd Alnogedan is a Senior Lawyer at the Law Firm of Salah Al-Hejailan (in association with Freshfields LLP). Email: [email protected].
Saad Al Qahtani is a Senior Lawyer at the Law Firm of Salah Al-Hejailan (in association with Freshfields LLP) and is certified by the Saudi Bar Association and Licensed by the Ministry of Justice. Email: [email protected]