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Employment Contracts in Saudi Arabia
A Guide for Employers

May 22, 2024


Delta International

Employment, Contracts, Saudi Arabia, Employers

Employment Contracts in Saudi Arabia: A Guide for Employers

What is an Employment Contract?

An employment contract is a legally binding agreement between an employer and an employee that outlines the terms of their employment. It typically includes information such as the employee's job title, salary, benefits, working hours, and termination terms.

Employment contracts are important for both employers and employees. They provide employers with a way to ensure that their employees are meeting their job requirements, and they provide employees with a degree of protection against unfair treatment.

In Saudi Arabia, employment contracts are governed by the Labor Law of Saudi Arabia. This law sets out the minimum requirements for employment in Saudi Arabia contracts, as well as the rights and responsibilities of employers and employees.

Types of Employment Contracts in Saudi Arabia

There are three main types of employment contracts in Saudi Arabia:

Fixed-term Contracts

Fixed-term contracts are typically for a specific period of time, such as one year or two years.

Indefinite-term Contracts

Indefinite-term contracts are for an unspecified period of time and can be terminated by either the employer or the employee at any time, with or without notice.

Part-time Contracts

Part-time contracts are for a shorter number of hours per week than full-time contracts.

The type of employment contract that is most appropriate for a particular employer and employee will depend on the specific circumstances of the job.

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The Rights and Responsibilities of Employers and Employees Under an Employment Contract

Under an employment contract, both employers and employees have certain rights and responsibilities. These include:

  • Employers are responsible for providing employees with a safe and healthy work environment, as well as paying them on time and in full for their work.
  • Employees are responsible for performing their work duties in a timely and efficient manner, as well as following all company policies and procedures.
  • Both employers and employees have the right to terminate the employment contract, but they must follow the terms of the contract and any applicable laws.

It is important for both employers and employees to understand their rights and responsibilities under an employment contract. By doing so, they can avoid any misunderstandings or conflicts.

How to Negotiate an Employment Contract

When negotiating an employment contract, it is important to be prepared and to know what you want. Here are some tips for negotiating an employment contract:

Do Your Research

Before you start negotiating, do your research on the market rate for your position and the benefits that are typically offered. This will help you to come to the table with a realistic understanding of what you can expect.

Be Clear About Your Goals

What are you looking for in an employment contract? What are your priorities? Once you know what you want, you can start to negotiate accordingly.

Be Prepared to Compromise

Negotiation is a two-way street. While you should be prepared to stand up for what you want, you should also be prepared to compromise.

Be Respectful and Professional

Even if you are negotiating with someone who is difficult, it is important to stay respectful and professional. This will help you to maintain a positive relationship with your future employer.

Be Patient

Negotiation can take time. Don't be discouraged if you don't reach an agreement immediately. Keep working at it and you will eventually reach a deal that works for both parties.

By following these tips, you can increase your chances of negotiating a successful employment contract.

Termination of an Employment Contract

An employment contract can be terminated by either the employer or the employee, subject to the following conditions:

  • The employer must have a valid reason for terminating the contract, such as misconduct or poor performance.
  • The employee must give the employer at least one month's notice of their intention to terminate the contract.
  • The employer must pay the employee their full salary and any other benefits that are owed to them.

If an employer terminates an employment contract without a valid reason, or without giving the employee the required notice, the employee may be entitled to compensation.

The Ministry of Human Resources and Social Development (MHRSD) is responsible for enforcing the laws on employment contracts in Saudi Arabia. If an employer or employee has a dispute about an employment contract, they can file a complaint with the MHRSD.

The Role of the Ministry of Human Resources and Social Development (MHRSD) in Employment Contracts

The Ministry of Human Resources and Social Development (MHRSD) is the government agency responsible for regulating employment contracts in Saudi Arabia. The MHRSD has a number of roles in relation to employment contracts, including:

  • Providing guidance on the legal requirements for employment contracts
  • Enforcing the laws governing employment contracts
  • Providing mediation and arbitration services for disputes arising from employment contracts

The MHRSD also publishes a number of resources on overseas employment contracts, including model contracts and templates. Employers and employees are encouraged to consult with the MHRSD for advice on employment contracts.


In this guide, we have provided you with a comprehensive overview of employment contracts in Saudi Arabia. We have covered everything from the legal requirements for employment contracts to the rights and responsibilities of employers and employees. We hope that this guide has been helpful and that you now have a better understanding of how employment contracts work in Saudi Arabia.

If you have any further questions about employment contracts in Saudi Arabia, please do not hesitate to contact the Ministry of Human Resources and Social Development (MHRSD).

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