Saudi Labor Law (Royal Decree No. M/51 of 1426 H)

المادة 1

This law shall be called the Labor Law.

المادة 2

In this Law, the following terms shall have the meanings assigned thereto, unless the context requires otherwise: Ministry: Ministry of Labor. Minister: Minister of Labor. Labor Office: The administrative authority assuming jurisdiction over the labor affairs within an area specified by a decision of the Minister. Employer: Any natural or corporate person employing one or more workers for a wage. Worker: Any natural person - male or female - working for an employer and under his management or supervision for a wage, even if said person is not under his direct control. Minor: Any person of 15 and below 18 years of age. Work: The effort exerted in all human activities in execution of a (written or unwritten) employment contract regardless of their nature or kind, be they industrial, commercial, agricultural, technical, or otherwise, whether physical or mental. Original Work: For individuals: Their usual business activities. For firms: The activities for which the firm was established as stated in its articles of incorporation, franchise contract – if a franchise company, or Commercial Register. Temporary Work: Work considered by its nature to be part of the employer’s activities, the completion of which requires a specific period or relates to a specific job and ends with its completion. It shall not exceed 90 days in either case. Incidental Work: Work that is not considered by its nature to be part of the usual activities of an employer, and its execution does not require more than 90 days. Seasonal Work: Work that takes place during known periodical seasons. Part-Time Work: Work performed by a part-time worker for an employer and for less than half the usual daily working hours at the firm, whether such a worker works on a daily basis or on certain days of the week. Continuous Service: The uninterrupted service of a worker for the same employer or his legal successor from the starting date of service. Service shall be deemed continuous in the following cases: 1. Official holidays and vacations. 2. Interruptions for sitting for examinations in accordance with the provisions of this Law. 3. Worker’s unpaid absences from work for intermittent periods not exceeding 20 days per work year. Basic Wage: All that is given to a worker for his 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 he exerts at work or for risks he encounters in the course of performing his work, or those decided for the worker for the work under the employment contract or work organization regulation. This includes: 1. The commission or percentage from sales or profits paid against what the worker markets, produces, collects, or realizes from increased or enhanced production. 2. Allowances the worker is entitled to for exerted effort or risks he encounters while performing his job. 3. Increments that may be granted in accordance with the standard of living or to meet family expenses. 4. Grants or rewards: What the employer grants to a worker and what is paid to him 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 himself to provide to the worker for his work by stating the same in the employment contract or the work organization regulation, and it is estimated at a 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. Wage: actual wage. Firm: Any enterprise run by a natural or corporate person which employs one or more workers for a wage of any kind. Month: 30 days, unless otherwise specified in the employment contract or the work organization regulation. Regulations: The Implementing Regulations of this Law.

المادة 3

Work is the right of every citizen. No one else may exercise such right unless the conditions provided for in this Law are fulfilled. All citizens are equal in the right to work without discrimination on the basis of gender, disability, age, or any other form of discrimination, whether during their performance of work, at the time of employment, or at the time of advertising

المادة 4

When implementing the provisions of this Law, employers and workers shall adhere to the provisions of Sharia.

المادة 5

Provisions of this Law shall apply to the following: 1. Any contract whereby a person commits himself to work for an employer and under his management or supervision, for a wage. 2. Workers of the government and public organizations and institutions including those who work in pastures or agriculture. 3. Workers of charitable institutions. 4. Qualification and training contracts with workers other than those working for the employer within the limits of the relevant provisions provided for in this Law. 5. Part-time workers with respect to safety, occupational health, and work injuries, as well as decisions issued by the Minister.

المادة 6

Incidental, seasonal, and temporary workers shall be subject to the provisions on duties and disciplinary rules, the maximum working hours, daily and weekly rest intervals, overtime work, official holidays, safety rules, occupational health, and work injuries and compensation therefore as well as whatever is decided by the Minister.

المادة 7

1. The following shall be exempted from the implementation of the provisions of this Law: a) The employer's family members, namely, the spouse and the ascendants and descendants who constitute the only workers of the firm. b) Players and coaches of sports clubs and federations. c) Domestic workers and the like. d) Agricultural workers, private herdsmen, and the like. e) Sea workers working on board vessels with a load of less than 500 tons. f) Non-Saudi workers entering the Kingdom to perform a specific task for a period not exceeding two months. 2. The Minister shall issue, in coordination with relevant agencies, one or more regulations for the categories set out in subparagraphs (a), (c), (d), (e), and (f) of paragraph (1) of this Article, containing the rights, obligations, and other special provisions related to each category.

المادة 8

Any condition that conflicts with the provisions of this Law shall be deemed null and void. The same applies to any release or settlement of the worker’s rights arising from this Law during the validity of the employment contract, unless the same is more beneficial to the worker.

المادة 9

Arabic shall be the language used for data, records, files, employment contracts, and the like as provided for in this Law or in any decision issued in implementation of its provisions as well as the instructions issued by the employer to his workers. If the employer uses a foreign language besides Arabic in any of the aforementioned cases, the Arabic text shall prevail.

المادة 10

All periods and schedules provided for in this Law shall be according to the Hijri calendar, unless otherwise stated in the employment contract or the work organization regulation.

المادة 11

If the employer assigns all or part of his original work to a natural or corporate person, the latter shall give his workers all the rights and privileges which the original employer gives to his workers.

المادة 11 bis

Without prejudice to the provisions of this Law and relevant regulations, the Minister may take any measures that would improve the performance of the labor market and regulate labor mobility.

المادة 12

1. The Ministry shall develop one or more model bylaws which shall include rules and regulations related to the conduct of work. It shall also include provisions relating to benefits, violations, and disciplinary actions. 2. The Ministry shall set rules regulating the adoption of bylaws.

المادة 13

1. Every employer shall draft bylaws for his firm in line with the Ministry’s model bylaws. Exceptions to this provision may be granted by the Minister. 2. The employer may incorporate into the bylaws additional terms and conditions that do not conflict with the provisions of this Law, its Regulations, and the decisions for the implementation thereof. 3. The employer shall make the bylaws and any amendments thereto accessible to employees in a manner that ensures their knowledge of the provisions.

المادة 14

Repealed

المادة 15

An employer shall, upon commencement of work in any firm, notify the competent labor office in writing of the following data: 1. Name, type, and headquarters of the firm, as well as its mailing address and any information that facilitates contact therewith. 2. Line of business for which it is licensed, providing the number of the Commercial Register or the license, its date, and issuing authority, together with a copy thereof. 3. Number of workers to be employed in the firm. 4. Name of the firm’s manager in-charge. 5. Any other data required by the Ministry.

المادة 16

1. If the employer is unable to run the business in person, he shall designate a representative at the workplace. In case of multiple partners or managers in the firm, one of them, from among those residing at the place of work, shall be nominated to represent the employer and be liable for any violation of the provisions of this Law. 2. The employer shall notify the competent labor office in writing of the name of the partner or manager, and, in case he is replaced, he shall notify the labor office of the name of the new partner or manager within seven days at most of the date the latter assumes the job. 3. In case no manager is appointed to be in charge of the firm, or if the appointed manager does not assume his duties, then the person who actually runs the firm or the employer himself shall be considered the manager in charge of the firm. In all cases, the employer is ultimately liable.

المادة 17

An employer shall maintain, at the workplace, records, statements, and files the nature and contents of which shall be specified in the Regulations. He shall display at a visible location at the workplace a schedule of working hours, breaks, weekly rest days, and the time each shift starts and ends, when operating in shifts.

المادة 18

If the ownership of a firm is transferred to a new owner or a change takes place in its legal form through merger, partition, or otherwise, employment contracts shall remain in force in both cases and service shall be deemed continuous. As for workers’ rights accrued for the period prior to the change, such as wages or unrealized end-of-service awards on the date of the transfer of ownership and other rights, the predecessor and the successor shall be jointly and severally liable. However, in the case of transfer of ownership of individual firms, for any reason, the predecessor and the successor may agree to transfer all the previous rights of the worker to the new owner subject to the written consent of the worker. If the worker disapproves, he may request the termination of his contract and collect his dues from the predecessor.

المادة 19

Amounts due to the worker or his heirs under this Law shall be deemed first rate privileged debts and the worker and his heirs shall, for the purpose of settling them, be entitled to a privilege over all the employer’s properties. In case of the employer’s bankruptcy or the liquidation of his firm, the aforementioned amounts shall be entered as privileged debts and the worker shall be paid an expedited amount equivalent to one month wage prior to the payment of any other expenses including judicial, bankruptcy, or liquidation expenses.

المادة 20

An employer or a worker may not perform any act that may abuse the provisions of this Law or the decisions or regulations issued for its implementation. Neither of them may undertake any act that infringes upon the freedom of the other or the freedom of other workers or employers to realize any interest or impose a point of view that conflicts with the freedom of work or the jurisdiction of the competent authority in charge of the settlement of disputes.

المادة 21

The Minister, in implementing the provisions of this Law, shall coordinate with relevant authorities whenever necessary.

المادة 22

The Ministry shall provide employment units, free of charge, at locations convenient for employers and workers, which shall undertake the following: 1. Assist workers in finding suitable jobs and aid employers in recruiting suitable workers. 2. Gather necessary information on the labor market and its developments and analyzing such information to make it available to various public and private organizations concerned with economic and social planning affairs. 3. Perform the following duties: 3.1 Registering job seekers. 3.2 Obtaining data on vacant jobs from employers. 3.3 Referring workers’ applications to suitable vacant jobs. 3.4 Providing advice and assistance to job seekers with respect to vocational qualification and training or the required retraining to fill vacancies. 3.5 Other matters decided by the Ministry.

المادة 23

Every citizen of working age who is capable of work and willing to work may register his name at the employment unit along with his date of birth, qualifications, previous employment, preferences, and address.

المادة 24

The Regulations shall specify the rules and procedures for work progress at employment units, forms of registers, notices, and other papers used for its work in addition to job classification tables, according to the official job classification, which shall be the basis for organizing recruitment.

المادة 25

Every employer shall send the following to the competent labor office: 1. A statement of vacant and new jobs, their types, locations, wages, and qualifications within a period not exceeding 15 days from the date of vacancy or creation thereof. 2. A notice of the measures taken to employ the citizens nominated by the employment unit within seven days from receiving the nomination letter. 3. A list of the names, jobs, professions, wages, ages, and nationalities of his workers, as well as the numbers and dates of work permits for non-Saudis and other data specified in the Regulations. 4. A report on the status, conditions, and nature of work and the anticipated increase or decrease in jobs during the year following the date of the report. 5. The statements specified in paragraphs (3) and (4) of this Article shall be sent during the month of Muharram of every year.

المادة 26

1. All firms in all fields, and regardless of the number of workers, shall work to attract and employ Saudis, create conditions to keep them on the job, and avail them of adequate opportunities to prove their suitability for the job by guiding, training, and qualifying them for their assigned jobs. 2. The percentage of Saudi workers employed by an employer shall not be less than 75% of the total number of his workers. The Minister may temporarily reduce this percentage in case of the lack of adequate technically or academically qualified workers or if it is not possible to fill vacant jobs with nationals.

المادة 27

The Minister may – when necessary in certain activities and professions and in some provinces and counties - require employers not to employ workers until they have been registered at employment units under the terms and conditions specified pursuant to his decision.

المادة 28

Each employer employing 25 workers or more where the nature of his work allows recruitment of the professionally disabled shall employ a number of disabled persons that represents at least 4% of the total number of his workers whether through nomination by employment units or otherwise, and he shall send to the competent labor office a list of the jobs and posts occupied by professionally rehabilitated disabled persons and their wages.

المادة 29

If a worker sustains a work injury that results in a loss in his usual capabilities that does not prevent him from performing another job, the employer, under whose service the work injury was sustained, shall employ said worker in a suitable job for the wage specified for such job. This shall not prejudice the worker's due compensation for the injury.

المادة 30

A natural or corporate person may not engage in the recruitment of Saudis or in the recruitment of workers from abroad unless licensed for the same by the Ministry. The Regulations shall determine the functions of these two types of activities, the conditions for granting and renewing a license to each of them, and the duties and prohibitions as well as rules for non- renewal or revocation of the license and the consequences thereof, and other conditions and controls necessary for ensuring the proper conduct of business.

المادة 31

Saudi workers to whose employment the recruitment offices contributed and workers recruited from abroad on behalf of employers shall be deemed workers of the employer and bound to him by direct contractual relation.

المادة 32

Recruitment from abroad for the purpose of work may not be undertaken without the approval of the Ministry.

المادة 33

A non-Saudi may not engage in or be allowed to engage in any work except after obtaining a work permit from the Ministry, according to the form prepared by it for this purpose. The conditions for granting the permit are as follows: 1. The worker has lawfully entered the country and is authorized to work. 2. The worker possesses the professional or academic qualifications which the country needs and which are not possessed by citizens or the available number of such citizens is insufficient to meet the needs, or that he belongs to the class of ordinary workers that the country needs. 3. The worker has a contract with an employer and is under his responsibility. The word work in this Article shall mean any industrial, commercial, agricultural, financial, or other work, and any service including domestic service.

المادة 34

No permit or license required by any other agency for engaging in a work or profession shall substitute for said work permit.

المادة 35

The Ministry may decline to renew the work permit if the employer violates the Saudization requirements set by the Ministry.

المادة 36

The Minister shall issue a decision specifying the professions and jobs which are prohibited for non-Saudis.

المادة 37

The employment contract for non-Saudis shall be written and of a fixed term. If the contract does not specify the duration, the duration of the work permit shall be deemed the duration of the contract.

المادة 38

An employer may not employ a worker in a profession other than the one specified in his work permit. A worker is prohibited from engaging in a profession other than his before taking the legal measures necessary to change his profession.

المادة 39

1. Unless he has followed the stipulated legal rules and procedures, an employer may not allow his worker to work for others, and a worker may not work for other employers. Similarly, an employer may not employ the workers of other employers. The Ministry of Labor shall inspect firms, investigate violations of this paragraph detected by its inspectors, and refer them to the Ministry of Interior for the imposition of prescribed penalties. 2. An employer may not allow a worker to work for his own account and a worker may not work for his own account. The Ministry of Interior shall be in charge of detection, detention, deportation, and imposition of penalties on violators working for their own account in streets and squares, as well as absconding workers and persons employing, hiding, or transporting them as well as any person involved in such violation, and shall impose the prescribed penalties against them.

المادة 40

1. An employer shall bear the fees pertaining to the recruitment of non-Saudi workers, the fees for issuing and renewing residence permit (Iqama) and work permit, and the fines resulting from their delay, as well as the fees pertaining to change of profession, exit and re-entry visas, and return tickets to the worker’s home country at the end of the relation between the two parties. 2. A worker shall bear the costs of returning to his home country if he is unfit for work or if he wishes to return to his home country without a legitimate reason. 3. An employer shall bear the fees of transferring the services of a worker who wishes to transfer his service to him. 4. An employer shall be responsible for the cost of preparing the body of a deceased worker and transporting it to the location where the contract was concluded, or where the worker was recruited unless the worker is interred in the Kingdom with the approval of his family. The employer shall be relieved if the General Organization for Social Insurance (GOSI) undertakes the same.

المادة 41

The Regulations shall specify the conditions, controls, and procedures for recruitment from abroad, transfer of services, and change of profession.

المادة 42

An employer shall be required to prepare his Saudi workers and enhance their technical, administrative, vocational, and other skills for the purpose of gradually replacing non-Saudis. The employer shall keep a record showing the names of the Saudi workers who have replaced non-Saudis in accordance with the conditions and rules set forth in the Regulations.

المادة 43

Without prejudice to the conditions set forth in franchise and other agreements regarding training and qualification, every employer employing 50 or more workers shall annually train, in his business, a number of his Saudi workers not less than 12% of the total number of his workers. This percentage shall include Saudi workers who are pursuing their studies if the employer is covering their tuition fees. The Minster may raise this percentage in certain firms pursuant to a decision by him.

المادة 44

The training program shall include the rules and conditions to be followed in training, its duration, number of hours, theoretical and practical training programs, testing method, and the certificates to be granted in this regard. The Regulations shall set forth the general criteria and rules to be followed in this regard to raise the worker’s level of performance in terms of skill and productivity.

المادة 45

A training or qualification contract is a contract which commits the employer to train and qualify a person for a specific profession.

المادة 46

A training or qualification contract shall be in writing, indicating the profession for which the training is contracted, the duration of training and its successive stages, and the allowance to be paid to the trainee at each stage, provided that it is not based on piecemeal or productivity.

المادة 47

The Minister may require firms, to be determined pursuant to a decision by him, to accept a certain number or percentage of the students and graduates of colleges, institutes, and centers to receive training and supplementary practical experience in accordance with the conditions, circumstances, durations, and trainee allowances to be specified in an agreement to be concluded between the Ministry and the management of the relevant firm.

المادة 48

1. The employer may terminate the training contract if it is established that the trainee is incapable of completing the training program. The trainee or his guardian shall be entitled to the same. The party seeking to terminate the contract shall notify the other party of this at least one week prior to the date of termination of training. 2. Following completion of training, the employer shall be entitled to require the trainee to work for him for a period equivalent to that of the training. If the trainee refuses to work for a similar period or part thereof, he shall pay to the employer the cost of training incurred by the employer or the cost of the remaining period.

المادة 49

The training and qualification contract shall be subject to the provisions of this Law in terms of annual vacations, official holidays, maximum working hours, daily and weekly rest periods, occupational health and safety rules, and work injuries and their conditions as well as whatever is decided by the Minister.