The Ministry of Commerce in Saudi Arabia has issued a directive instructing all government and private entities to no longer use the term ‘sponsor’, but instead to use the term ’employer’. This directive is in accordance with Article 2 of the Labor Law, which defines an employer as “any natural or legal person who employs one or more workers in return for a wage”. The Ministry’s directive was sent to the Federation of Saudi Chambers, which then conveyed it through a circular to chambers of commerce and industry across the Kingdom. The circular emphasized that a ‘worker’ is any natural person, male or female, who works for the benefit of the employer under his management or supervision in exchange for a wage.
In 2021, the Ministry of Human Resources and Social Development launched the Contractual Relationship Improvement Initiative, which aimed to provide various services to workers, including freedom of job mobility, freedom of exit and reentry, and freedom of final exit. Since the initiative was implemented, there has been a 50 percent decrease in the rate of labor disputes in Saudi Arabia. The Ministry also announced that one million workers have already benefited from the Contractual Relationship Improvement Initiative. This initiative has helped to improve the working conditions and rights of workers in the Kingdom.
The decision to replace the term ‘sponsor’ with ’employer’ is a significant move by the Ministry of Commerce in Saudi Arabia. By using the term ’employer’, the Ministry is emphasizing the rights and responsibilities that employers have towards their employees. This shift in language reflects a broader effort by the government to improve labor relations and protect the rights of workers in the Kingdom. The Ministry’s directive is part of a broader effort to promote a more equitable and transparent labor market in Saudi Arabia.
The Contractual Relationship Improvement Initiative launched by the Ministry of Human Resources and Social Development has had a positive impact on labor relations in Saudi Arabia. By providing workers with greater freedom and flexibility in their employment contracts, the initiative has helped to reduce the number of labor disputes in the Kingdom. The Ministry’s efforts to improve the contractual relationship between employers and workers have been well-received, with one million workers already benefiting from the initiative.
The Ministry’s directive to replace the term ‘sponsor’ with ’employer’ is a reflection of the government’s commitment to improving labor relations in Saudi Arabia. By clarifying the roles and responsibilities of employers and workers, the Ministry is promoting a more harmonious and productive work environment. The move to use the term ’employer’ also aligns with international labor standards and best practices, which emphasize the importance of treating workers fairly and with respect. Overall, this shift in language is a positive step towards creating a more inclusive and equitable labor market in Saudi Arabia.
In conclusion, the Ministry of Commerce’s directive to replace the term ‘sponsor’ with ’employer’ is a significant development in Saudi Arabia’s efforts to improve labor relations and protect the rights of workers. The Contractual Relationship Improvement Initiative launched by the Ministry of Human Resources and Social Development has already had a positive impact, with one million workers benefiting from the initiative. By promoting greater freedom and flexibility in employment contracts, the initiative has helped to reduce the number of labor disputes in the Kingdom. The Ministry’s efforts to improve the contractual relationship between employers and workers are part of a broader commitment to creating a more equitable and transparent labor market in Saudi Arabia.
