Contracts in Saudi Arabia

Overview by

The Active Population in Figures

Employed Persons, by Occupation (% of Total Labor Force) 2005
Agriculture 12.0%
Industry 25.0%
Services 63.0%

Source: International Labor Union (ILO).
CIA, The World Fact Book

For Further Statistics
Ministry of Economy and Planning
Central Department of Statistics (CDS)
For Further Information About the Labor Market
ILO, International Labor Organization

Management of Human Resources



Method of Recruitment
Direct recruiting is the most popular method of recruitment. However, Internet is also fast becoming popular hiring tool.
Recruitment Agencies
Saudi Arabia has no nationally-organized job centers, and it's the responsibility of the Ministries of Labor and Social Affairs to deal with employment.
Recruitment Websites
4International Careers and Jobs

The Contract

Type of Contract
Broadly there are two types of contracts: Permanent and Fixed-term.

Majority of the contacts for foreigners in the labor sector are of fixed-term, while as for the locals these are of permanent type.

The number of 'temporary contracts' is very low.

Breach of Contracts
  • Retirement
The contract can be terminated by agreement of the two parties, at end of period of contract, at the request of either part in case of indefinite term contract or in case of force majeure.
  • Dismissals
According to the Saudi law, an employer has a right to terminate the services of an employee without giving a reason, though this position has been weakened through various court orders.


However, employees cannot be dismissed while they are on sickness leave or disablement leave or on maternity leave.

  • Other Possible Methods
•  Collective dismissals due to economic reasons.

•  Disciplinary dismissals

•  Resignation as per the terms of contract.

Labor Laws
Summary of Saudi Arabia Labor Law

Dispute Settlement


Conciliation Process

  • Legal Framework

Labor Offices attempt to amicably resolve the dispute between the worker and the employer.

Incase the attempt is futile, complaints referred to the one of the two commissions- the Preliminary Commissions for Settlement of Labor Disputes, the High Commission for Settlement of Labor Disputes.

The commissions settle these cases on the basis of Labor Laws.
  • Procedure
Islamic Law (the Sharia) forms the basis for Labour Laws in the country. Visit the below given links:




Judicial Structures

  • Legal Framework
Islamic Law (the Sharia) is the main source of law in Saudi Arabia.
  • Competent Legal Body
There are thirty seven Labor Offices in the country. In case of failure of dispute settlement the case can be referred the Preliminary Commissions and High Commission.

Social Partners

Social Dialogue and Involvement of Social Partners
The labor law does not provide for collective bargaining. However, the companies that employ more than 100 Saudis are allowed to form "labor committees." There are 15 labor committees registered in the Kingdom.
Regulation Bodies
Ministry of labor

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