Employment Contracts Policy Template
The purpose of employment contracts policy is to outline the terms and conditions under which Saudi employment contract between employers and employees should be administered. It covers types of employment contracts, conversion from fixed-term to indefinite contracts, probation period and contract renewal & termination.
Created by
Naif O. Alawbathani
|
Human Resources Adviser
Written by HR expertsFully customizableSaudi labor law ComplaintShare the calculator with an HR college
What’s included in the employment contracts policy?
The employment contract policy distinctly defines the various employment contract types issued by the company. For each type, it details the duration, termination method, and employee nationality, further outlining crucial associated rights such as end-of-service benefits.
The policy details the method for contract conversion, specifically addressing how fixed-term contracts evolve into indefinite-term contracts.
In addition, employment contract policy addresses a crucial element: the probation period. It clearly outlines its duration, the process and responsible parties for extension, and the conditions and requirements for contract termination during this initial phase.
The company employment contract commits to complying with the Saudi labor law articles governing contract management, seeking transparency and documentation. It also emphasizes that legal channels are the dedicated way to resolve any employment contract disputes.
Employment Contracts Policy - Table of contents
1. Overview
2. Objectives
3. Employment Contracts
4. Fixed-term Contracts
5. Indefinite Contracts
6. Temporary Employment Contract
7. Conversion from Fixed-term to Indefinite Contracts
8. Probation Period
9. Contract Renewal & Termination
10. Legal Compliance
Why do you need an employment contracts policy?
Transparency and clarity of employer/employee relationships
Ensuring legal compliance, and proper documentation.
Clarifying probation period, duration, extension and termination.
Establishing a clear framework for employee rights and obligations.
How do you use the model?
Download the template and review the content.
Customize it with name, logo and your own specific rules using Jisri chatbot.
Use clear, unambiguous language and the proper names of contract parties.
Ensure compliance by getting employment contracts policy reviewed by a legal/HR expert.
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FAQ
What is indefinite contract of employment?
An indefinite contract of employment is a type of agreement without a specified end date. It is a permanent contract under which an employee continues working for an employer until either party decides to terminate the agreement.
This type of contract is concluded exclusively with Saudi employees. As the name suggests, it reflects the intention of both the employer and the employee to work together indefinitely. However, either party can end the contract for a valid reason, as long as they give written notice before the termination date.
What is the meaning of an employment contract letter?
A contract letter is a formal document employers issue to new hires before they accept and begin their duties in a new position. It outlines the terms and conditions of employment and is typically provided at the start of the employee’s journey with the company. This letter helps establish the working relationship between the employer and the employee, holding both parties accountable throughout the employee’s tenure.
What are the types of employment contracts?
The Saudi labor law recognizes several types of employment contracts, each designed to suit different working arrangements and needs. Below are the main types:
Indefinite Employment Contract: Exclusive to Saudi employees, does not require renewal and either party may terminate it at any time with a legitimate reason.
Fixed-Term Employment Contract: It has a defined duration and automatically ends upon its expiration, unless both parties agree to renew.
Temporary Employment Contract: Duration not to exceed 90 days and employer is not obligated to pay end-of-service benefits or compensation.
Occasional Employment Contract: Applies to incidental tasks that are not part of the company’s core business, with a maximum duration of three months.
Seasonal Employment Contract: Used for work related to specific seasons, such as the Hajj season. Employees must be between 25 and 48 years old, except for doctors.
Part-Time Employment Contract: For jobs that require fewer than half of the standard daily working hours.
How can an employment contract in Saudi Arabia be legal?
The Saudi Labor Law sets out specific conditions for employment contracts. Key provisions include:
The Saudi labor law employment contract for a non-Saudi employee must be in writing and for a fixed term. If the duration is not specified, the contract will be considered valid for one year from the employee’s start date.
The contract must be prepared in two copies—one for the employer and one for the employee.
The employment contract must be officially documented through Qiwa.
If the employee is subject to a probation period, this must be explicitly stated in the contract. The probation period must not exceed 180 days.
What are the most common items included in a standard employment contract?
According to Article 52 of the Saudi Labor Law, the most common items included in a standard employment contract are:
The name and place of the employer.
The name and nationality of the worker, proof of identity and place of residence.
Agreed upon wage, including benefits and allowances.
Type and location of work.
Date of employment.
Duration of the contract if fixed.