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A definite-term contract becomes indefinite if the parties continue to observe the contract after the agreed expiry date.
Wages
There is no prescribed minimum wage under Saudi law. It is generally accepted, and has been ruled in the past by the Commission for the Settlement of Labour Disputes, that the salary and benefits under a fixed term-contract, as well as the employee's status, may not be reduced during the contract term. However, at the end of a fixed-term contract, the parties may re-negotiate their respective positions, provided the employee is given a clear choice whether or not he wishes to accept the new employment conditions.
In the past, it was also accepted that an employee enjoyed the same protection under an indefinite-term contract. However, in recent years the view has emerged that if an indefinite term contract is terminated upon proper notice, it may be possible to re-hire the employee on new terms with reduced wages and benefits, particularly when the employer can demonstrate that there are valid reasons for such a change.
Working hours
Normal working hours are eight hours a day, six days a week. Work in excess of 48 hours a week must be compensated at overtime rates, except for certain categories of work such as the catering trade.
Saudi Arabian public holidays are set by the Labour Minister and may not exceed 10 days a year. During Ramadan, the maximum working hours for Muslim employees are reduced to six hours a day for six days a week, for a total of 36 hours. It is common for Muslim employees to receive an extra month's salary on the occasion of Eid al-Fitr, a public holiday that marks the end of Ramadan.
Probationary periods
An employer is entitled to request an employee undergo a probationary period of no more than 90 days. This probationary period must be stipulated in the employment contract, otherwise it will not apply.
Leave
Paid annual leave can vary, but under the Labour Law, employees are entitled to 21 days on full wages, which is increased to a period of not less than 30 days if the worker has worked five consecutive years for the same employer. Provisions are contained in the Labour Law dealing with parental leave, religious leave, unpaid leave, educational leave and sick leave.
Confidentiality obligations
The Labour Law imposes an obligation on an employee to maintain confidentiality in relation to the employer's business information.
Social and health insurance
The Social Insurance Regulations require employers who have at least one foreign employee to make monthly contributions to the General Organisation for Social Insurance (GOSI) on behalf of each employee. These contributions are calculated as a percentage of the employee's basic salary and accommodation allowance, not exceeding SR45,000 ($12,000) a month.
Health and safety
The Labour Law provides for prevention against major industrial accidents in high-risk facilities, and vocational injuries. A high-risk facility is defined as one that produces hazardous substances, or that handles, removes or stores such hazardous waste. Employers will have to coordinate with the Labour Ministry to determine the status of their facilities based upon guidelines issued by the minister.
An employer is entitled to request an employee undergo a probationary period of no more than 90 days. This probationary period must be stipulated in the employment contract, otherwise it will not apply.
Leave
Paid annual leave can vary, but under the Labour Law, employees are entitled to 21 days on full wages, which is increased to a period of not less than 30 days if the worker has worked five consecutive years for the same employer. Provisions are contained in the Labour Law dealing with parental leave, religious leave, unpaid leave, educational leave and sick leave.
Confidentiality obligations
The Labour Law imposes an obligation on an employee to maintain confidentiality in relation to the employer's business information.
Social and health insurance
The Social Insurance Regulations require employers who have at least one foreign employee to make monthly contributions to the General Organisation for Social Insurance (GOSI) on behalf of each employee. These contributions are calculated as a percentage of the employee's basic salary and accommodation allowance, not exceeding SR45,000 ($12,000) a month.
Health and safety
The Labour Law provides for prevention against major industrial accidents in high-risk facilities, and vocational injuries. A high-risk facility is defined as one that produces hazardous substances, or that handles, removes or stores such hazardous waste. Employers will have to coordinate with the Labour Ministry to determine the status of their facilities based upon guidelines issued by the minister.
