Employee Contract Agreement for Saudi Arabia

Employee Contract Agreement Template for Saudi Arabia

This Employee Contract Agreement is a comprehensive legal document designed to comply with Saudi Arabian Labor Law (Royal Decree No. M/51) and its implementing regulations. The agreement establishes the formal employment relationship between an employer and employee, detailing essential terms and conditions including job responsibilities, compensation, working hours, leave entitlements, and other benefits as required under Saudi law. The document incorporates mandatory provisions required by Saudi labor regulations while allowing for customization based on specific employment terms, ensuring compliance with both Sharia principles and modern employment practices in Saudi Arabia.

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What is a Employee Contract Agreement?

The Employee Contract Agreement serves as the foundational document governing the employment relationship in Saudi Arabia. It is required by Saudi Labor Law for all formal employment relationships and must be written in Arabic (with the option for an additional language version). This contract type is essential when hiring any employee in Saudi Arabia, whether for permanent or fixed-term positions, and must include specific provisions required by local law. The agreement covers fundamental aspects such as compensation, working hours, leave entitlements, and end-of-service benefits, while ensuring compliance with Saudization requirements and other local regulations. It's designed to protect both employer and employee interests while maintaining alignment with Saudi labor regulations and Sharia principles.

What sections should be included in a Employee Contract Agreement?

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

2. Background: Brief context of the employment relationship and purpose of the agreement

3. Definitions: Key terms used throughout the agreement

4. Appointment and Term: Job title, employment status (definite/indefinite term), start date, and probation period details

5. Duties and Responsibilities: Main job responsibilities, reporting lines, and work location

6. Compensation and Benefits: Base salary, allowances, bonuses, and other benefits as per Saudi Labor Law

7. Working Hours and Days: Standard working hours, days, overtime provisions, and break periods in accordance with Labor Law

8. Leave Entitlements: Annual leave, sick leave, Hajj leave, and other statutory leave entitlements

9. Medical Insurance: Health insurance coverage as per Saudi law requirements

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

11. Termination: Grounds and procedures for contract termination, notice periods, and consequences

12. Confidentiality: Protection of company confidential information and trade secrets

13. Governing Law: Confirmation that Saudi Law and Sharia principles govern the agreement

What sections are optional to include in a Employee Contract Agreement?

1. Non-Competition: Restrictions on working with competitors post-employment, used for senior positions or roles with access to sensitive information

2. Intellectual Property Rights: Assignment of IP rights, relevant for technical or creative roles

3. Performance Reviews: Details of performance evaluation process, useful for roles with performance-based compensation

4. Training Obligations: Training requirements and commitments, relevant for specialized roles or graduate programs

5. Remote Work Provisions: Terms for remote working arrangements, if applicable

6. Commission Structure: Detailed commission calculations for sales or similar roles

7. International Assignment Terms: Additional terms for expatriate employees or international assignments

8. Stock Options/Share Schemes: Details of any share-based compensation, typically for senior executives

What schedules should be included in a Employee Contract Agreement?

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

2. Schedule 2 - Compensation Details: Breakdown of salary components, allowances, and benefits

3. Schedule 3 - Company Policies: Key company policies including code of conduct, IT usage, and HR policies

4. Schedule 4 - Bonus Scheme: Details of any applicable bonus or incentive schemes

5. Appendix A - Required Documents: List of required documents for employment (certificates, IDs, etc.)

6. Appendix B - Medical Insurance Coverage: Details of medical insurance coverage and benefits

7. Appendix C - Safety Procedures: Workplace safety requirements and procedures specific to the role

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

Agreement Contract

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Banking and Financial Services

Healthcare

Manufacturing

Technology

Retail

Construction

Education

Energy and Utilities

Professional Services

Telecommunications

Hospitality

Real Estate

Transportation and Logistics

Mining and Minerals

Government and Public Sector

Relevant Teams

Human Resources

Legal

Finance

Operations

Information Technology

Sales

Marketing

Research and Development

Customer Service

Administration

Production

Quality Assurance

Business Development

Strategy

Compliance

Relevant Roles

Chief Executive Officer

Managing Director

Department Manager

Senior Executive

Project Manager

Software Engineer

Account Manager

Administrative Assistant

Sales Representative

Technical Specialist

Human Resources Officer

Financial Analyst

Operations Manager

Research Scientist

Marketing Coordinator

Customer Service Representative

Legal Counsel

Production Supervisor

Data Analyst

Business Development Manager

Industries
Saudi Labor Law (Royal Decree No. M/51): The primary legislation governing employment relationships in Saudi Arabia, covering aspects such as employment contracts, working hours, leave entitlements, termination procedures, and employee rights
Implementing Regulations of the Labor Law: Detailed regulations that provide specific guidance on the application of the Labor Law, including workplace policies, disciplinary procedures, and administrative requirements
Social Insurance Law: Regulations governing mandatory social insurance coverage, including workplace injury insurance and pension contributions through the General Organization for Social Insurance (GOSI)
Saudization (Nitaqat) Regulations: Requirements for hiring Saudi nationals and maintaining specific quotas of Saudi employees based on company size and sector
Wage Protection System (WPS) Regulations: Rules requiring employers to pay wages through approved local banks and submit wage data to the Ministry of Human Resources and Social Development
Occupational Safety and Health Regulations: Standards and requirements for workplace safety, health conditions, and protective measures for employees
Anti-harassment Regulations: Recent regulations implementing workplace anti-harassment policies and procedures as per Ministry of Human Resources and Social Development requirements
Working Hours and Leave Regulations: Specific rules regarding working hours, overtime, weekly rest days, and various types of leave entitlements including annual, sick, and Hajj leave
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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