The key areas in Saudi Law latest changes 2016:

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  • Probationary periods

    This period can be extended up to 180 calendar days (six months in total). This allows employers more flexibility in establishing whether the employee is suitable for the role. An employee can now also be placed under a second probation period with the same employer if more than six months have passed since the employee was previously terminated by the employer.

  • Relocation

    Allows the employer to transfer the employee to another geographic place of work in Saudi Arabia so long as the employee approves it in writing.

    In addition ,The low allows the employer to transfer the employee’s geographic place of work for any reason and without the employee’s approval for no more than 30 days per year so long as the employer bears the employee’s costs and expenses for doing so.

  • Notice periods

    Saudi Law expanded the termination notice period for unlimited contracts employee from 30 to 60 days’ for employees who are monthly paid. A minimum of 30 days’ is required for hourly payable employees.

  • Leave

    A number of amendments increasing short-term leave have been introduced.

    • Maternity leave: female workers are now entitled to 10 weeks’ maternity leave fully paid, to commence maximum four weeks before the expected date of delivery. The leave can also be extended for an additional month on an unpaid basis.
    • Marriage and bereavement leave: leave due to marriage or death of an immediate family member has been increased from three to five days.
    • Paternity leave: leave has been increased from one to three days.

    Employees serving their notice periods are now entitled to eight fully paid hours per week or a full day per week to look for alternative employment.

  • Unauthorised leave

    Employers may terminate the employee’s contract without compensation in the event the employee is absent from work “without a valid reason” for either:

    • More than 30 non-consecutive days a year.
    • For more than 15 consecutive days within a year.

    In the first case, a prior written warning must be delivered to the employee after 20 days of non-consecutive absence and in the second case the warning must be delivered after 10 days of consecutive absence.

  • Compensation

    Unless the parties agree in advance and in writing on the amount of compensation payable upon termination without “valid reason”, the party terminating the contract will have to compensate the other with either:

    • A wage equivalent to 15 days for each completed year of employment, in indefinite term contracts.
    • The balance of wages for the remaining employment term, in the fixed-term contract.

    In each case, the minimum amount of compensation may not be less than two months’ wages.

  • Renewability

    Fixed term contracts that are renewed more than three times (or upon the employee accruing four years of continuous service, whichever comes sooner) will automatically convert into indefinite term contracts.

  • References and sanctions

    Departing employees have the right to request upon termination a service certificate setting out details of their employment. The employers are prohibited from giving negative references which could hinder the employee’s chances of securing alternative employment.

    Employers are also required to maintain written records of any fines imposed on their employees. The information required includes the worker’s name, their remuneration, the date, the reason for and the amount of the fine imposed.

  • Training requirements

    An employer with more than 50 employees is required to provide training to at least 12% of its total number of Saudi Arabian employees. Employer must be able to provide documentary evidence of the training.

  • Working hours

    Employees’ daily working hour limit has been increased from 11 to 12 hours provided that the employees do not work for more than five consecutive hours.

  • Company policies and employment contracts

    The New Implementing Regulations include a standard form employment contract .Companies are required to follow the form of employment contract prepared by the Ministry of Labor.

  • Work injuries

    Employers must provide financial aid to employees temporarily unable to work due to injuries suffered at work at the rate of 75% of the employees’ wage. The Labor Office will determine the compensation that is owed to the worker based on a medical report specifying the degree of invalidity.

  • Enforcement

    The Ministry of Labor inspectors are no longer authorised to close businesses “on the spot”. All potential violations must be reviewed by the Ministry of Labor.

    Depending on its severity, any violation of the law may be subject to monetary fines or business suspension or closure.

    Finally, the new amendments provide the Minister of Labor with a discretionary right to grant a financial reward of up to 25% of the total amount of collected penalties against any information that assists inspectors or others in revealing violations of the Labor Law.