Application of the executive instrument for fixed-term contracts in Saudi Arabia

Introduction: A new step towards regulating the labor market

The Ministry of Human Resources and Social Development in Saudi Arabia announced the launch of the second phase of its initiative to recognize the "documented employment contract as an enforceable instrument." This important phase targets fixed-term contracts, specifically those being updated or renewed upon expiry. This strategic step is part of the Ministry's ongoing efforts to enhance the reliability of contractual relationships and improve the efficiency of procedures related to safeguarding the rights of all parties involved in employment.

General context and historical background of the event

This decision falls under the umbrella of Saudi Vision 2030 and the National Transformation Program, which aims to develop the work environment in the Kingdom. Historically, labor disputes have been lengthy and protracted in the courts, prompting the Saudi government to launch the Contractual Relationship Improvement Initiative and a comprehensive digital transformation of government services. Through a strategic partnership between the Ministry of Human Resources and the Ministry of Justice, the Ministry of Labor and the Ministry of Justice have established a technical link between their platforms to transform contracts into legally enforceable instruments, thus drastically streamlining judicial procedures.

Details of the second phase and the implementation mechanism

The Ministry clarified that benefiting from an enforcement order requires documenting or updating the employment contract through the Qiwa, and then obtaining an enforcement number from the Documentation Center at the Ministry of Justice. In a move to safeguard the worker's rights, if the worker does not receive their full wages within 30 days of the due date, or receives only a portion after 90 days, they have the right to submit a direct electronic enforcement request through the Najiz. To ensure fairness, the employer has the right to object within five days of being notified.

The importance of the event and its expected impact

At the local level: This decision contributes to reducing the volume of labor cases in the courts, and ensures the rapid delivery of financial rights to workers, which enhances the stability of the Saudi labor market and increases employee productivity by ensuring their rights proactively.

At the regional and international levels, this measure reflects the Kingdom's commitment to International Labour Organization (ILO) standards, which enhances Saudi Arabia's ranking in global competitiveness indices. Furthermore, a transparent and safe work environment is a key attraction for global talent and increases foreign investor confidence in the Saudi market.

A call for commitment and documentation

The Ministry of Human Resources and Social Development emphasized to all establishments the necessity and importance of documenting and updating contracts through the establishment's account on the "Qiwa" platform. It also urged employers and employees to review the guidance manual available on its website, which includes all details, regulations, and eligible categories.

Looking ahead: Towards the third phase

This phase currently targets fixed-term contracts, paving the way for the application of the decision to open-ended contracts in the third and final phase. This phased approach gives various establishments and employees the opportunity to gradually adapt to the new procedures, building a work environment based on clarity and transparency, and ensuring the fair and effective implementation of rights.