What is Employment Contract in KSA 2023? | Updated Guide

An employment contract in KSA according to Labour Law is a contract undertaken between an employer and employee where the subject works under the supervision of the former for an agreed-on salary. 

An employee is a natural person who works under the supervision or management of the employer for an agreed-upon salary even regardless if they are in direct control

An employer is a corporate person who employs one or more workers to work for them.

When a contract is reached by both parties, it should be written and duplicated where each party retains one copy.

When a written contract is absent, the employer should be able to establish whatever proof necessary to establish the existence of the contract and entitlements that may arise from it.

Contracts such as those involving part-time workers and foreign national employees should be in the form of a written contract.

Employment Contract in KSA as per Labour Law – Duties


A standard employment contract has been provided by The Ministry which is in accordance with the Labour Law which  includes:

1. The name of the employer and the address.

2. The name of the employee, number of identification, and nationality.

3. The commencement date of employment. 

4. The salary which was agreed upon. 

5. Status of the contract either fixed term or its duration.

6. The location and the type of work.

A must, is all the employment files, instructions, and records that are issued by the employer to the employees, and the employment contract should be in Arabic. In the case of a different language, Arabic should be more prevalent.

The employer and the employee apart from the contents of the standard employment contract, they may decide to add any other contents provided they don’t contradict the Labour Law.

Any content that is contradictory with the Labour Laws or release of employee’s rights provided it is more beneficial than the provision of the Laws is deemed null and void. 

On agreement of the contract, the employers are required to upload all the contracts to GOSI online portal to check for authenticity

On uploading of the contract in the portal, the employees are notified so as to confirm if the information fed in is in accordance with whatever was agreed upon.

Duties of the employer

1. Not to employ workers without pay.

2. Forbid entry of illegal substances into the workplace.

3. Treat the employees with respect and in a way that does not affect their religion or their dignity.

4. Allow the employees time to carry out their statutory rights, without defecting their pay but they should do it in a way that does not interfere with the work progress.

5. Allow the related Authority to carry out any task related to Labour Law enforcement.

6. Not to retain employee’s pay without authorization of the Authority

Duties of the employees

1. Perform work given in accordance with the guidelines and terms of the contract as long as they do not conflict with public morality or the law and do not expose the workers to hazards.

2. Abide by the ethical norms of the work.

3. Undergo any medical examination prior to or during employment to ascertain there’s no presence of communicable ailments.

4. Extend any help or assistance required in case of any emergency or hazard that may be threatening the workplace or fellow workmates.

5. Take good care of the employer’s equipment, raw materials, and supplies placed in the employee’s custody. 

6. Keep the employer’s industrial secrets where it’s likely to alter the employer’s interests.

Types of contracts and employees

Employment contracts for Saudi nationals have a fixed term or indefinite while those of foreign nationals have a fixed term and in this case, there is no specification of the term it is taken to be the duration of residence.

Fixed term contracts 

These contracts end on the completion of certain work provided.
A clause to this effect enables a contract to be renewed. In the case of renewal, the employee is deemed to have continuous service with the employer. If the contract is renewed 3 times or the employee has been employed by the employer for four years, the worker is deemed to have an indefinite term contract with the employer but it’s not applicable to foreign nationals. 

Contracts are either full or part-time work

Part-Time contracts should state the number of working hours and must be in writing. Employees in this type of contract are covered only by certain provisions.

Varying the contract

It is only when the employer and the employee agree that the terms of the contract may be altered.

If the employer provides work that was not agreed upon without written consent, this entitles the employee to end the contract without notice. 

In the case that an employer decides to relocate an employee to a different workplace, which leads to the worker changing residence, it is required that there should be written consent of the employee.

Termination as per KSA Labor Law 

Employment Contract

The employment contract in KSA may be terminated:

Without notice, if the employee:

  •  fails the medical examination.
  • On the employee attaining the age of; fifty years for the female and sixty years for the male employee’s retirement. This is unless both parties agree to continue with the contract past the retirement age. 
  • Mutual agreement between both parties. 

Related Post: Reasons for Termination and Solutions

The employee may be dismissed by the employer without notice for:

  • Assaulting and disrespecting management.
  • Acts that infringe integrity and honesty.
  • Causing loss to the employer knowingly
  • Being absent from work for a period of ten consecutive days or for a period of twenty days in a year.
  • Disclosing the secrets of the company that affects the company.
  • Use of fake means to acquire the job.
  • Using the company’s resources for personal interest.
  • Disobedience.
  • Not being able to perform the duties assigned.
  • Unable to follow orders. 

The worker may terminate the contract without notice if:

  • The employer does not fulfill his duties
  • The employee is given work that was not specified in the contract.
  • The employer commits an immoral act or assaults the employee or the relatives.
  • Employer exposes the employee to hazards without any protection or care.
  • The employer is unjust to the employee or violates the contractual agreement.

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