(5 min read)
The recent amendments to the KSA Labour Law constitute the most sweeping and impactful updates to the Kingdom's employment regulations since 2015. Set to take effect in February 2025, these revisions aim to modernise employment practices, enhance worker rights, and support Saudi Vision 2030. This article explores the key amendments and their implications for employers and employees.
At a meeting held on August 6, 2024, the KSA Council of Ministers approved substantial amendments to the Labour Law, marking a pivotal moment in the Kingdom's employment landscape. These changes reflect a commitment to modernising employment practices to enhance job stability, protect employee rights, and align with Saudi Vision 2030's objectives for economic diversification.
A Snapshot of Key Amendments
Contract Form
- Employment contracts for non-KSA nationals must be in writing and have a fixed term. If no duration is specified, the contract will default to one year from the employee's start date. Should employment continue beyond this period, the contract will automatically renew for an equivalent duration.
Resignation Procedures
- Employees on fixed-term contracts can resign with a written request, effective after 30 days if unaddressed by the employer.
- Employers may delay acceptance of a resignation for up to 60 days for valid business reasons, provided they notify the employee with written justification before the initial 30-day notice period expires.
Until now, the concept of resignation had not been explicitly recognised under KSA Labour Law, making this a pivotal advancement that enhances clarity and fairness in managing employee relations for both employers and employees.
Notice and Termination of Employment
- Bankruptcy is now considered a lawful reason for termination.
- Employees now have 30 days (previously 15) to object to disciplinary actions, and if no response is received within 15 days, they may file a claim in labour courts within the following 30 days.
- The notice period for terminating indefinite contracts has been revised to 30 days when initiated by the employee and 60 days when initiated by the employer, ensuring greater clarity and fairness in managing employment relationships.
Leave Entitlements
- Maternity Leave: Increased to 12 weeks.
- Paternity Leave: Male employees entitled to 3 days leave within 7 days of delivery.
- Bereavement Leave: 3 days for the death of a sibling added to existing entitlements.
Enforcement and Penalties
- Enhanced penalties for non-compliance with Saudization and unauthorized recruitment.
- Ministry of Human Resources and Social Development empowered to withhold work permit renewals for violations.
Conclusion
The amendments to the KSA Labour Law signify a progressive step toward aligning the Kingdom's employment practices with international standards. These changes bring opportunities for growth and inclusivity but also introduce complexities requiring proactive adaptation.
Next Steps
The recent amendments to the KSA Labour Law introduce significant changes that will impact employment practices across the Kingdom. To ensure compliance and avoid potential legal risks, all employers should take the following steps:
1. Review Employment Contracts:
- Assess your current employment contracts to ensure they align with the updated legal requirements, including new provisions for resignation, notice periods, and fixed-term contracts for non-KSA nationals.
2. Update Policies and Procedures:
- Revise internal policies to reflect changes in leave entitlements, training obligations, and disciplinary procedures.
- Ensure clarity in policies related to resignation processes and grounds for lawful termination.
3. Enhance Compliance Frameworks:
- Implement systems to manage new obligations, such as housing and transport allowances, probationary periods, and Saudization training quotas.
- Prepare for enhanced enforcement measures and penalties by ensuring compliance with all aspects of the law.
We are here to help you navigate these changes with clarity and confidence. Whether you need assistance reviewing contracts, updating policies, or understanding the implications of the amendments, our team is ready to support you. Please get in touch to discuss how we can assist in ensuring your business is fully prepared for these transformative changes.
