Evergreen Employment Contract Template for Saudi Arabia

An Evergreen Employment Contract is a permanent, indefinite-term employment agreement used in Saudi Arabia to establish ongoing employment relationships without a fixed end date. Unlike fixed-term contracts, this document creates a continuous employment relationship that complies with Saudi Labor Law and provides stability for both employers and employees operating within the Kingdom's regulatory framework.

When do you need this document?

You need an Evergreen Employment Contract when hiring employees for permanent positions in Saudi Arabia, particularly for roles where long-term stability is essential. This contract is ideal for establishing employment relationships with both Saudi nationals and expatriate workers who will be working indefinitely. Companies expanding their operations in Saudi Arabia often use this contract type to build stable teams while complying with Nitaqat Saudization requirements. The document is also necessary when converting temporary or project-based employees to permanent status, ensuring proper documentation of the new employment terms under Saudi labor regulations.

Key legal considerations

The contract must include mandatory provisions required by Saudi Labor Law, including specific working hours that comply with Ministerial Resolution No. 1/1982, comprehensive leave entitlements, and clear end of service benefit calculations. You must ensure the salary structure aligns with the Wage Protection System (WPS) requirements for electronic salary transfers and includes proper documentation of social insurance contributions under GOSI regulations. The agreement should clearly define probationary periods, notice requirements for termination, and conditions for contract renewal or modification. Consider including clauses that address confidentiality, non-competition within legal limits, and intellectual property rights while ensuring all terms comply with Islamic law principles that govern Saudi employment relationships.

Legal requirements in Saudi Arabia

Saudi Labor Law (Royal Decree No. M/51) mandates that all employment contracts include specific information about the parties, job duties, workplace location, working hours, and compensation details. The contract must comply with maximum working hour limitations and mandatory rest periods as specified in ministerial regulations. Employers must ensure proper registration with the Ministry of Human Resources and Social Development and maintain compliance with Nitaqat program requirements for Saudi national employment quotas. The agreement must incorporate provisions for mandatory social insurance coverage through GOSI, including workplace injury insurance and pension contributions. All salary payments must be processed through the Wage Protection System to ensure timely and documented wage transfers, and the contract should reference applicable visa and work permit requirements for expatriate employees.