Dubai: The Saudi Arabian labour market is on the brink of significant transformation with the introduction of new amendments to the Saudi Labour Law, effective from February next year.
The amendments were detailed in Royal Decree M/44, which was published in Umm Al Qura (Saudi Arabia’s official gazette) on 19/02/1446H (corresponding to 23 August 2024). According to the legal experts who spoke with Gulf News, several articles have been amended, two new articles added, and seven deleted, in the new decree.
“We have seen significant reform in employment legislation across the region in recent years. The amendments are on trend and the introduction of additional employee-friendly provisions is in line with legislative changes that we are seeing across the Gulf, as each country seeks to attract and retain the best talent,” Joanna Matthews–Taylor, partner at the law firm Baker McKenzie UAE, told Gulf News.
But what exactly are these changes? Here is a breakdown.
The amendments are on trend and the introduction of additional employee-friendly provisions is in line with legislative changes that we are seeing across the Gulf, as each country seeks to attract and retain the best talent.
1. Extended maternity leave
Maternity leave has been increased from 10 weeks to 12 weeks, providing new mothers with more time to bond with their newborns.
“The amendments extend paid maternity leave by two weeks, to a total of 12 weeks. Six weeks of maternity leave must be taken following the birth of the child. The remaining six weeks can be distributed as the employee sees fit, starting from four weeks prior to the expected date of delivery,” Rebecca Ford, partner at the law firm Morgan, Lewis & Bockius, said.
2. Bereavement leave for siblings
According to Ford, the amendments also introduce a new entitlement to paid bereavement leave of three days in the event of the death of a sibling, in Article 113.
The amendments extend paid maternity leave by two weeks, to a total of 12 weeks. Six weeks of maternity leave must be taken following the birth of the child. The remaining six weeks can be distributed as the employee sees fit, starting from four weeks prior to the expected date of delivery.
3. Clearer probationary periods
Article 53 of the amended law now allows parties to agree on a 180-day probationary period from the outset, providing greater clarity and flexibility.
“Probation must still be included in the employment contract, and the period shall not exceed 180 days. We expect that the parties will now be able to agree up to 180 days from the outset rather than 90 days to be extended by a separate written agreement between the parties for a subsequent period(s) up to 180 days. It remains to be seen whether the parties will be able to agree to any extension(s); the Implementing Regulations will provide further details in this regard, including vacations that will be excluded from the probation period, likely all public holidays, sick leave, and possibly other leaves such as bereavement,” Christiana O’Connell-Schizas, counsel at Baker McKenzie Law Firm Saudi Arabia, explained.
4. Flexible overtime options
Employees and employers can now agree on paid time off instead of monetary compensation for overtime work.
“The amendments retain the provision that overtime be compensated monetarily with the same calculation, and introduce the option for the parties to agree to paid time off instead of compensation. The Implementing Regulations will elaborate on this provision,” O’Connell-Schizas said.
The amendments refer to the Labour Law's implementing regulations, so we expect that the Minister of the Ministry of Human Resources and Social Development (MHRSD) will issue amendments to, or new implementing regulations to address the recent changes on or before the date the amendments will come into force.
5. Termination of employment
“The amendments introduce an express concept of employee resignation, so that an employee may resign from employment prior to the expiry of a limited term. The resignation will be considered effective where the employer either accepts the resignation or a period of 30 days has passed without a response from the employer. Alternatively, the employer may defer the resignation by a maximum of 60 days. In the case of an unlimited term contract for Saudi nationals, the notice required to be given by the employee has been reduced from 60 to 30 days. The proposed amendments to termination of employment give greater flexibility to both parties,” Ford explained.
6. Increased employer obligations
Employers are now required to provide adequate housing or a cash allowance, as well as suitable transportation or a cash allowance for their employees.
“The amendments include an obligation on the employer to provide either accommodation and transport, or housing and transport allowances. These are not addressed in the current Labour Law, but it is proposed that they will be added to the employer duties in Article 61,” Ford said.
“The amendments to the Labour Law will add a duty on employers to refrain from doing anything that would undermine equal opportunities or treatment in employment, whether through exclusion, differentiation or preference between job applicants or employees on the basis of race, colour, gender, age, disability, marital status, or any other form of discrimination. This enhances the existing right under the Labour Law which provides that all nationals have equal rights to work without discrimination on the basis of gender, disability, age, or other form of discrimination, whether during the performance of the job, or the hiring process, without expressly imposing an obligation on the employer,” she added.
7. Term of a foreign national’s contract
There are also changes to how a foreign national employee’s contract term is calculated.
“Non-Saudi employees must be employed under limited term contracts. However, under the current law, where the contract fails to specify the period of the limited term, the Labour Law states that the limited term shall be determined by reference to the expiry of the work permit. The amendments to the Labour Law state that where the contract is silent, the limited term shall be assumed to be for a period of one year, starting from the employee’s commencement date. This gives certainty as to the limited term expiry date, particularly where the work permit and employment dates can become misaligned,” Ford said.
More implementing regulations are expected
“The amendments refer to the Labour Law's implementing regulations, so we expect that the Minister of the Ministry of Human Resources and Social Development (MHRSD) will issue amendments to, or new implementing regulations to address the recent changes on or before the date the amendments will come into force,” O’Connell-Schizas said.
