Saudi Labor Law

The Saudi Labor Law contains all aspects regarding the final departure or re-entry of expatriate workers. In addition, it determines the conditions for the specific cases of dismissal or resignation of an employee. For you to carry out these processes without problems, we offer you our comprehensive guide.

In this article, you will find the key tips to understanding Saudi Labor Law with the advice of Company Formation Saudi. Likewise, you will know the articles of law that determine the resignation or termination of the employment contract in the country. Let us see:

1. What are the keys of the Saudi Labor Law for such processes?

2. How can we help you understand aspects of Saudi Labor Law?

1. What are the keys of the Saudi Labor Law for such processes?

The Saudi Labor Law allows expatriates to apply for a visa for their final departure from the territory. In addition, this process can be carried out through Absher, both for himself and for his dependents. However, they must take into account each of the rules and aspects involved in these processes.

Take a look at the following information provided by Company Formation Saudi:

1.1 Final exit visa for employees

Before you can go through the process, you must meet the requirements of the Saudi Labor Law for final exit. Therefore, you must meet the conditions established to apply for this visa through Absher. 

1.1.1 Procedure

The procedure for the application for the final exit visa can be done through the Absher page. Likewise, when you enter the official portal, you must go to the exit visa application section. In addition, you must agree that you recognize the risk of breaching the contractual relationship, which includes not working in the country again.

Also, the system will notify you if you do not meet the established requirements through an error message. The new applicable Saudi Labor Law rules for this process include:

• The period for the employer to approve or reject the request is 10 days.
• If accepted, the worker will have 5 days to issue the visa.
• If the employer denies the request, the MOL will review the response and issue a decision within 10 days.
• If there is no response from the employer within 10 days, the request is considered accepted.

In the same way, your employer can use their system to obtain this final exit visa. You should also know that the validity period of this document is 15 days after being issued.

1.2 Print the Final Exit Letter

If an employee plans to return to the country to apply for a visa, they must print the letter. However, the Absher website specifies that it is not necessary to print the final exit visa. On Company Formation Saudi, we recommend that you have physical proof that you have completed this process.

1.3 Remain in Saudi Arabia after final exit approval

After the final departure request is approved, it has a validity period of 60 days from its issuance. However, the Saudi Labor Law for final exit requested from the employer has a legally established validity of 15 days. Also, in this case, the period that your Iqama is valid is irrelevant after the issuance of said visa.

You will have to pay a fine of SR 1,000 if you do not leave Saudi Arabia before the expiry date. Nevertheless, you can cancel the definitive exit visa within its validity period without getting a penalty. 

1.4 Preparation before the final exit

Under Saudi Labor Law, there are certain things you must do before applying to your employer. Nevertheless, some of them are optional, and others must be done on a mandatory basis.

1.4.1 Mandatory matters 

Among the mandatory aspects are:

• Payment of the rate by your dependents (before 60 days).
• Pay traffic fines if you have incurred any.
• Submit your resignation to the company within the period established by law.
• If you own a vehicle in your name, you will need to sell it or transfer ownership.

1.4.2 Optional things to do

Similarly, you can choose to perform the following actions:

• Obtain the benefits of the end of service of your contract.
• Obtain the police record certificate of the country.
• Pay postpaid bills for services such as internet, mobile, and electricity.
• Close your bank account in Saudi Arabia.
• Cancel your lease.
• Pay the requested loans, as well as credit cards.

1.5 Final exit without Kafeel

Previously, Saudi Labor Law required the worker to present their case in court to obtain this visa. However, now an employee can obtain the final exit permit without the approval of his Kafeel (sponsor). You can do this at the end of the contract you signed with a company.

1.6 Article 80 of Saudi Labor Law

Regarding the termination of contracts before the established time, it can happen differently due to dismissal or resignation. In the case of employee dismissal, Article 80 of Saudi Labor Law establishes 9 special scenarios. Likewise, in these cases, the employer will not have to pay benefits or comply with a notice period.

Despite this, the employee will still be entitled to receive payment of wages that are due. Furthermore, this dismissal can only occur after the employee can explain his reasons for opposing it. 

• 80 (1) – Aggression by the employee to his employer or any of his representatives at or because of work.
• 80 (2) – The employee does not comply with the established duties, does not obey orders, or does not follow safety instructions.
• 80 (3) – Misconduct, dishonesty, or infractions may justify the dismissal of an employee who incurs said acts.
• 80 (4) – Deliberate errors executed to cause damage are also cause for the dismissal of the worker. In this case, the employer must notify the employee of the action within 24 hours of the event.
• 80 (5) – A worker can be fired if the employer proves that he has falsified any document.
• 80 (6) – An employee can be fired on probation.
• 80 (7) – An employer may discharge a worker for absence in the event of:
  • 30 days in a year, after a written warning after 20 days.
  • 15 consecutive days, after a 10-day warning.

• 80 (8) – If the employee obtains a benefit from his labor authority.
• 80 (9) – The violation of confidentiality also leads to a dismissal.

1.7 Article 81 of Saudi Labor Law

Article 81 of Saudi Labor Law specifies the cases in which an employee can resign without notice. Therefore, it is reciprocal to the previous article where there are details of dismissal without the right to receive benefits. Also, these are all special cases, and the employees must specify the section when writing their resignation.

• 81 (1) – The employer fails to fulfill its legal or contractual obligations such as payment of wages or failure to provide an Iqama. In this case, the employee can transfer his Iqama without needing the permission of the sponsor/ Kafeel.
• 81 (2) – The employer committed fraud regarding working conditions and circumstances. Likewise, this resignation can be made by the worker in the trial period.
• 81(3) – A worker may resign without notice if the employer needs the employee to perform work other than what was agreed upon. However, Article 30 of the Saudi Labor Law determines that an employer can do this for 30 days in the year.

However, an employer may not hire an expatriate to pursue a profession other than that of his Iqama.

• 81 (4) – The employer or one of its representatives committed a violent act against the worker or a relative of the worker.
• 81 (5) – The employer or any of its representatives has frequently cruel, unfair, or insulting treatment.
• 81 (6) – If the work area represents a safety or health risk for the worker. In this case, the employee can resign if the employer has been notified and has not improved said conditions.
• 81 (7) – If the employer presents the worker as the party that terminates the contract due to unfair treatment or violation of the contract.

1.8 Saudi Labor Law termination of contract and resignation

There are 2 types of contracts in Saudi Arabia and there are rules in the Saudi Labor Law for the termination of a contract and resignation. Additionally, each of these processes varies according to the type of contract the worker has. Contact Company Formation Saudi for more.

1.8.1 Fixed-Term Contract

All employees must sign a fixed-term contract with the company where they will work in the country. In this case, the resignation or termination of the contract is defined by law as follows:

1. Article 74 of the Labor Law specifies that there must be a notice period in the event of resignation or dismissal. In addition, the case of dismissal is at the end of the fixed-term contract of the employee.
2. Article 77 establishes that, if any of the parties decides to terminate the contract, it must compensate the injured party. Also, this article specifically talks about this happening before the end of the contract.

1.8.2 Indefinite contract

A fixed-term contract becomes an indefinite contract in the case of:

1. If there is no renewal clause and the employer does not fire the employee at the end of the contract.
2. Three continuous renewals or after 4 years of service under Article 55 (2) of the Saudi Labor Law.

In addition, in the case of contract termination or resignation, these are defined in Articles 75 and 77 of said law.

1.9 Re-entry into Saudi Arabia

To re-enter Saudi Arabia, you must meet the prerequisites and go through the respective process. Requirements include:

• Pay the visa fees.
• Issuance of payment of traffic violations.
• Be present in Saudi Arabia at the time of visa issuance.
• The passport must have a validity period of at least 60 days.
• The Iqama of the applicant must be valid.
• Fingerprints of the applicant.

Also, the Iqama of employees must be valid for 90 days apart from the duration of the visa. Moreover, keep in mind that a re-entry visa is valid for a maximum of 30 days.

1.9.1 Saudi Arabia re-entry visa application process

The process to obtain a re-entry visa in Saudi Arabia for an employee includes the following steps:

1. Enter the account previously created in Absher.
2. Go to the re-entry visa application section.
3. Select the number of days (maximum 30) in the “Return Before” section.
4. Make the necessary confirmations.

Next, you must wait 10 days, after which you will have 5 days to issue the re-entry visa. Also, make sure you pay any fees required for the process.

2. How can we help you understand aspects of Saudi Labor Law?

Concerning the Saudi Labor Law for the final exit, the elements to obtain it are clear. Likewise, you must meet all the prerequisites to be able to leave the country without legal inconveniences, perhaps with the assistance of a lawyer in Saudi Arabia. In the same way, you must be clear about the aspects of labor law regarding the termination of contracts and resignation.

In our agency, we can help you carry out the procedures for the final departure, as well as for re-entry into the country.

In addition, the specialists of Company Formation Saudi put at your disposal the most convenient solutions related to:

• Company opening in Saudi Arabia.
• Payroll services.
• Accounting services.
• Immigration services.
• Setup of a virtual office.
• Opening of a branch in the country.
• Visa processing.

For more tips and information related to the mentioned services, you can always check out insights section where we answer many common questions on these matters.

Would you like to receive more information about the Saudi Labor Law and Company Formation Saudi? We have the best professionals to advise you. By calling us at +971 43 316 688, our experts will be able to assist you as many times as you need. Likewise, you can also contact us for any questions or legal advice via email at contact@companyformationsaudi.com.