Drafting an Employment Contract Template in Saudi Arabia

In the Kingdom of Saudi Arabia, an employment contract is a legally binding agreement between an employer and an employee, outlining the rights and obligations of both parties. To ensure compliance with local labor laws and protect the interests of both sides, it’s essential to draft employment contracts meticulously.

Key Components of an Employment Contract in Saudi Arabia:

1. Identification of Parties:

   • Employer Details: Name, commercial registration number, address, and contact information.

   • Employee Details: Full name, nationality, identification or passport number, and address

2. Job Description:
   • Clearly define the job title, duties, and responsibilities assigned to the employee.

3. Contract Duration:

   • Specify whether the contract is for a fixed term or indefinite.
   • For fixed-term contracts, mention the start and end dates and conditions for renewal.
4. Probationary Period:
   • If applicable, state the duration of the probationary period, not exceeding 90 days, during which either party may terminate the contract.
5. Working Hours:
   • Detail the daily and weekly working hours, ensuring they do not exceed 8 hours per day or 48 hours per week, as stipulated by Saudi labor laws.
6. Compensation:
   • Outline the basic salary, payment frequency, and any additional allowances or benefits.
7. Leave Entitlements:
   • Specify annual leave duration (not less than 21 days), sick leave policies, and any other applicable leaves.
8. Medical and Social Insurance:
   • Confirm the employer’s obligation to provide medical insurance and register the employee with the General Organization for Social Insurance (GOSI).
9. Termination Conditions:
   • Define the circumstances under which either party can terminate the contract, including notice periods and any associated obligations.
10. Dispute Resolution:
    • Include a clause detailing the method for resolving any disputes that may arise, preferably through amicable negotiations or, if necessary, legal proceedings by Saudi laws.

Resources for Drafting Employment Contracts:

• Monshaat (Small and Medium Enterprises General Authority): Provides a model employment contract template that can serve as a reference for drafting. citeturn0search0

   

• Qiwa Platform: This offers a step-by-step guide on creating contract templates, allowing businesses to tailor contracts to their specific needs while ensuring compliance with Saudi labor regulations. citeturn0search2

   

• Ministry of Human Resources and Social Development: Provides supplementary employment contract templates for both full-time and part-time positions, aligning with the executive regulations of human resources in civil service. citeturn0search5

   

Best Practices:

• Legal Compliance: Ensure that all contract terms adhere to the Saudi Labor Law and any sector-specific regulations.

   

• Clarity and Precision: Use unambiguous language to prevent misunderstandings.

   

• Customization: While templates provide a solid foundation, each contract reflects the specific agreement between the employer and employee.

   

• Consult Legal Experts: Engage with legal professionals specializing in Saudi labor law to review contracts, ensuring they meet all legal requirements and protect the interests of both parties.

   

By meticulously drafting employment contracts that encompass these components and considerations, employers in Saudi Arabia can establish clear, fair, and legally compliant relationships with their employees, fostering a transparent and productive work environment.