Secondment Contract Template for Saudi Arabia

A Secondment Contract is essential when you need to temporarily assign an employee to work for another organization in Saudi Arabia while maintaining their original employment status. This specialized agreement creates a three-party relationship between the home employer, host employer, and seconded employee, ensuring compliance with Saudi Labor Law and protecting everyone's interests throughout the arrangement.

When do you need this document?

You'll need a Secondment Contract when your company wants to loan skilled employees to business partners, subsidiaries, or clients for specific projects or knowledge transfer initiatives. This is particularly common in oil and gas, construction, and technology sectors where specialized expertise is required temporarily. International companies operating in Saudi Arabia frequently use secondment arrangements to deploy experienced staff from headquarters to local operations, or when Saudi companies need to access specialized skills without permanent hiring. Government contractors often second employees to fulfill specific project requirements, and consulting firms regularly second specialists to client organizations for defined periods.

Key legal considerations

Your Secondment Contract must clearly define the relationship between all three parties and specify which employer retains primary employment obligations. The agreement should address compensation arrangements, including who pays the employee's salary, benefits, and any secondment fees between organizations. You must include provisions for maintaining social insurance coverage under GOSI regulations and ensure the seconded employee's benefits remain protected. The contract should specify working conditions at the host organization, including hours, leave entitlements, and performance management responsibilities. Termination clauses are crucial, defining circumstances under which any party can end the secondment early and the procedures for returning the employee to their original role. You should also address confidentiality obligations, intellectual property ownership, and liability allocation between the organizations.

Legal requirements in Saudi Arabia

Under Saudi Labor Law (Royal Decree No. M/51), secondment arrangements must comply with specific regulations to be legally valid. Ministerial Resolution No. 1982 requires that secondment agreements clearly establish the temporary nature of the arrangement and maintain the employee's rights under their original employment contract. The Social Insurance Law mandates continued GOSI coverage throughout the secondment period, with clear responsibility allocation for contributions between employers. For foreign employees, you must ensure compliance with Iqama regulations and work permit requirements, as the secondment may affect visa status depending on the host organization's licensing. The contract must specify that the secondment doesn't exceed the maximum periods allowed under Saudi regulations and include provisions for wage protection system compliance. All parties must ensure the arrangement doesn't circumvent Saudi labor regulations regarding employment relationships, and the agreement should be documented in both Arabic and English where international parties are involved.