Saudi Arabia- Labour Law Reforms

Saudi Arabia- Labour Law Reforms

The Saudi Ministry of Human Resources and Social Development has launched a labour reform initiative through Resolution Number 51848/1442 to replace the Kafala system (Sponsorship). The kafala system affects the mobility of foreign workers who are sponsored by local employers in the country. The kafala system governs foreign workers' movement in terms of changing jobs, opening bank accounts, travelling outside the country, and any other administrative tasks. The new reforms aim to ease foreign workers' mobility in the private sector and emphasize the relationship between employers and foreign employees. The provisions are set to come into force on the 14th of March 2021.

1. Objectives of the Resolution:
2. Modernization of the terms of employment for expats.
3. Improvement of transparency and mobility and ease restrictions on entry and exit requirements.
4. Mitigation of risks associated with exploitation and combat black market practices and human trafficking.

The most significant changes introduced as per the initiative are as follows;

1. The Resolution deals with matters such as enabling foreign employees to leave their jobs without the consent of their employer upon expiration of the contract and enabling the foreign employee to leave their position before the expiry of their employment contract, provided that they have served a 90 days' notice to the employer and has worked in the country for at least a year. Further, the Resolution also aims to establish an electronic portal that enables both employers and employees to submit notifications, job offers, and requests for transfer or any other such task previously under the sole discretion of the sponsor.
2. The Resolution also lays down provisions for exit and re-entry. Before the introduction of these reforms, a foreign employee desirous of exiting the country could not do so without the prior consent of their employer or sponsor; however, this requirement has been removed, and now the foreign employee is permitted to directly apply for the same through the electronic platform provided by the government for this purpose. However, this request is subject to the refusal in case the person using for exit is liable to any outstanding fines or debts, as is applicable in most GCC countries. Upon approval of the request, the employer or sponsor shall receive an automatic notification when the employee exits and re-enters the country.
3. The sponsor or employer was previously required to sign a 'final exit visa' as per the immigration policy. Under the introduction of the Resolution, such consent is no longer necessary.