Contract To Hire Agreement for Saudi Arabia

Contract To Hire Agreement Template for Saudi Arabia

This document is a comprehensive Contract to Hire Agreement governed by Saudi Arabian law, designed to establish a temporary-to-permanent employment relationship between an employer and an employee. It complies with Saudi Labor Law, Saudization requirements, and Shariah principles while outlining the terms of initial employment, performance expectations, and conditions for conversion to permanent status. The agreement includes provisions for compensation, benefits, working conditions, and termination rights in accordance with Saudi Arabian employment regulations, while also addressing the specific requirements for transitioning from temporary to permanent employment status.

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What is a Contract To Hire Agreement?

The Contract to Hire Agreement is utilized when organizations in Saudi Arabia wish to evaluate potential permanent employees through an initial contract period before offering permanent positions. This arrangement is particularly relevant in the context of Saudi Arabia's dynamic employment market and Saudization initiatives. The document must comply with Saudi Labor Law, including Royal Decree No. M/51, and align with Shariah principles. It includes essential provisions for both the initial contract period and permanent employment phase, covering aspects such as compensation, benefits, performance evaluation criteria, and conversion conditions. This agreement type is especially valuable for companies implementing strategic hiring practices while managing their obligations under Saudi employment regulations, including Nitaqat requirements and GOSI contributions.

What sections should be included in a Contract To Hire Agreement?

1. Parties: Identification of the employer company and the employee, including full legal names and addresses

2. Background: Context of the agreement, including the purpose of the temporary-to-permanent arrangement

3. Definitions: Key terms used throughout the agreement, including 'Probationary Period', 'Permanent Employment Date', and other relevant terms

4. Term and Conversion: Duration of the initial contract period and conditions for conversion to permanent employment

5. Position and Duties: Job title, responsibilities, reporting structure, and work location

6. Compensation and Benefits: Salary, allowances, and benefits during both contract and permanent phases

7. Working Hours and Leave: Work schedule, overtime policies, and vacation entitlements as per Saudi Labor Law

8. Performance Evaluation: Performance criteria and evaluation process affecting conversion decision

9. Confidentiality and Data Protection: Non-disclosure obligations and handling of sensitive information

10. Intellectual Property Rights: Ownership of work product and innovations

11. Termination: Grounds for termination during both contract and permanent phases

12. End of Service Benefits: Calculation and payment of end of service benefits as per Saudi Labor Law

13. Governing Law and Jurisdiction: Application of Saudi law and dispute resolution mechanisms

14. Entire Agreement: Integration clause and relationship to other agreements

15. Execution: Signature blocks and execution formalities

What sections are optional to include in a Contract To Hire Agreement?

1. Non-Competition: Restrictions on working for competitors, used when employee will have access to sensitive information

2. Training Commitments: Required when specific training programs are part of the employment arrangement

3. Housing and Transportation: Include when additional allowances or arrangements for housing and transportation are provided

4. International Transfer Terms: Required for expatriate employees, covering visa sponsorship and related obligations

5. Commission Structure: Include for sales or commission-based positions

6. Medical Insurance: Detailed medical coverage terms when exceeding statutory requirements

7. Performance Bonus Scheme: Include when offering performance-based incentives

8. Remote Work Provisions: Include when remote work arrangements are permitted

What schedules should be included in a Contract To Hire Agreement?

1. Schedule 1 - Job Description: Detailed description of role, responsibilities, and requirements

2. Schedule 2 - Compensation Structure: Detailed breakdown of salary components and benefits

3. Schedule 3 - Performance Metrics: Specific KPIs and performance evaluation criteria

4. Schedule 4 - Company Policies: Reference to applicable company policies and procedures

5. Schedule 5 - Benefits Summary: Detailed description of all benefits and eligibility criteria

6. Appendix A - Required Documents: List of documents required for employment and visa purposes

7. Appendix B - Notice Periods: Detailed notice requirements for various situations

8. Appendix C - Code of Conduct: Company's code of conduct and ethical guidelines

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Saudi Arabia

Publisher

Genie AI

Document Type

Employment Contract

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Technology

Construction

Healthcare

Financial Services

Manufacturing

Professional Services

Oil and Gas

Retail

Education

Telecommunications

Logistics

Consulting

Real Estate

Hospitality

Relevant Teams

Human Resources

Legal

Finance

Operations

Information Technology

Sales

Marketing

Research and Development

Administration

Compliance

Project Management Office

Quality Assurance

Business Development

Customer Service

Relevant Roles

Software Developer

Project Manager

Financial Analyst

Sales Executive

Operations Manager

HR Specialist

Marketing Director

Technical Consultant

Business Development Manager

Account Manager

Research Scientist

Engineering Lead

Legal Counsel

Product Manager

Administrative Officer

Department Head

Executive Assistant

Quality Assurance Specialist

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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