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German Legal Expertise in the Middle East since 1981

New Amendments to the Saudi Labour Law to be Enforced
on October 18th, 2015

Guiding Principle

Following the approval of proposed amendments to the Labour Law by the Saudi Cabinet on March 23, 2015, the Ministry of Labour has set October 18, 2015 to be the date of enforcing the new amendments. This Article will provide a brief overview on these amendments.

A. Introduction

Having a large proportion of the Saudi labour market taken by expatriates, while there is a significant proportion of unemployment rate amongst the citizens, the Government is keen to keep the Labour Law meeting the developments of the market.

In line with these efforts, the Saudi Cabinet has approved the proposed amendments for the Labour Law on 23.03.2015. These amendments came shortly after recent amendments to the law about one year ago.

B. Amendments

The new amendments include 38 Articles of the Saudi Labour Law (“SA-LL”)[1] organizing various topics such as vocational training, qualifications, privileges granted to employers nationalizing the jobs, articles associated with employment contract as well as articles associated with women’s work and the mechanisms of inspection.

As per the new amendments, a married woman is now granted a leave for a period of 4 months and 10 days in the case of the decease of her husband. The  current period is 15 days as determined by Art. 160, SA-LL.

Each employer having a work force of 50 or more is obliged to train a percentage of Saudi Nationals of not less than 12% of this work force (instead of previously 6%).

The period of fixed term i.e. limited employment contracts is now extended to four years instead of three. Such contract shall be considered concluded for an indefinite i.e. unlimited period if renewed for three consecutive years.

The new amendments granted the Ministry of Labour the right to abstain from renewing the work permits whenever the employer violates the standards for nationalization the jobs as set by the Ministry.

Both Parties of the employment contract at the unlimited period contracts have the right to terminate the contract for a legitimate reason by a written notification to the other party with a period no less than 60 days for monthly paid workers.

All entities operating in the Kingdom now are obliged to pay the wages of their workers through local banks in line with the Wages Protection System.

Violations are now punished with penalties including fines reaching up to SR 100,000[2], and closing the violating entities for a period of 30 days or even permanently.

Further amendments might be imposed shortly as the Shoura Council (the Saudi Parliament) is currently studying other topics including reducing the weekly working hours from 48 to 40 hours.

[1] The Saudi Arabian Labour Statute (Law), promulgated by the Royal Decree No. M/51 dated 22.08.1426 corresponding to 26.09.2005, as amended; abbreviated (“SA-LL”).

[2] € 1 = Saudi Riyals 4.279 as per 14.10.2015. For the updated rates, kindly revert to the following website:

October, 2015 Hany Kenawi
Meyer-Reumann & Partners, Saudi Office
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