KSA Labour Law Developments To Usher In A New Era Of Labour Relations

In April 2015, amendments to the Saudi Labour Law (Royal Decree M/51, dated 23/08/1426, as amended, the 'Labour Law') were published (Resolution 258, dated 3/6/1436). These are expected to be implemented six months after publication, which will be 18 October 2015. Since publication, the amendments have been well-received and reflect the importance placed by the Kingdom of Saudi Arabia (KSA) on access to training and jobs by its nationals, and on ensuring that the statutory regime continues to reflect current work practices.

Interestingly, the amendments are likely to satisfy both employees and employers, as they provide more certainty over terms of employment, require more access to training for Saudi nationals and give more support to departing employees looking for alternative employment; and also provide greater flexibility to employers in managing the employment, by (amongst other things), increasing the probation periods, adjusting the fixed term periods, and increasing working hours.

The amendments will require employers to review and update their contracts of employment and company policies, not only to reflect the changes such as increased leave periods, but also to address some of the important developments regarding termination of the employment contract.

The amendments can broadly be grouped together as those which:

provide certainty over employment terms; facilitate Saudi nationals in the workplace; reflect current work practices; enable employers to terminate the employment of individuals in certain circumstances and provide support to departing employees; and increase sanctions for breaches (and also increase the chances of discovery of those breaches). This article will summarise the key amendments in each of these areas.

Certainty of employment terms

The Saudi Labour Law currently requires employers with more than ten employees to develop workplace regulations, to be submitted for approval to the Ministry of Labour. The amendments to the law will now require all employers (regardless of number of staff) to provide workplace regulations. Although the workplace regulations must conform to the model code or codes issued by the Ministry, the employer is entitled to incorporate additional terms, provided that they do not contradict the provisions of the Labour Law. Reference to the approval process previously contained in the Labour Law has been removed.

The amendments to the law also state that the Ministry will develop a...