The Ministry of Human Resources and Social Development has implemented an initiative to improve the contractual relationship between employers and employees in Saudi Arabia. This initiative has benefited around one million workers, with key features including freedom of job mobility, freedom of exit and reentry, and freedom of final exit. As a result of this initiative, the rate of labor disputes has decreased by 50 percent, indicating its success in enhancing the working environment for both employers and employees.
This initiative is part of the National Transformation Program 2020, which aligns with the Kingdom’s Vision 2030. By making amendments to the Labor Law rules and regulations, the initiative aims to enhance the competitiveness and attractiveness of the labor market for highly skilled expatriate workers. The ability for expatriates to have job mobility, improved mechanisms for exit and reentry, and final exit have all contributed to making the labor market more appealing to workers.
Specific rules apply for expatriate workers to benefit from the initiative, including being subject to the Labor Law and having completed 12 months with their current employer. The worker must also be on the payroll and have no pending requests to transfer to another employer. Adherence to the notice period specified in the employment contract is also required for eligibility to benefit from the initiative.
The Ministry’s Amicable Settlement Initiative has been successful in resolving labor issues through mediation and reaching amicable solutions. Trained personnel across the Kingdom conduct the mediation process to bring both parties closer together and resolve disputes. The success rate of resolving cases through amicable settlement is high at 77 percent, showcasing the effectiveness of this initiative in avoiding unnecessary legal proceedings.
Overall, the initiative to improve the contractual relationship between employers and employees in Saudi Arabia has had a positive impact on the labor market. By reducing labor disputes, enhancing job mobility for expatriates, and providing mechanisms for amicable settlement, the initiative has created a more conducive working environment for both employers and employees. This aligns with the goals of the National Transformation Program 2020 and Vision 2030 to strengthen the Kingdom’s economy and attract highly skilled workers.
