Today, 4 November 2020, the Ministry of Human Resources and Social Development (“MHRSD“) of the Kingdom of Saudi Arabia launched the Labor Reform Initiative under the National Transformation Program to enhance the contractual relationship between employees and employers in the Kingdom. It applies to all foreign national employees working in the private sector and will come into effect on 14 March 2021.

Key features include:

  • Transfer of employee without the current employer’s consent.
  • Travel outside the Kingdom without the employer’s approval (i.e. exit / re-entry visa). The employer will be notified electronically of the foreign national’s departure.
  • Leave the Kingdom at the end of employment without the employer’s consent (i.e. final exit visa). The employer will be notified electronically of the foreign national’s departure and the employee will be responsible for all consequences (financial or otherwise) for terminating the contract.

The above services will be made available to the public through Absher and Qiwa portal.

We will keep an eye on this in the coming weeks and circulate any further developments.

Author

Zahi Younes is a partner in the Saudi Arabia Corporate and Securities practice, specializing in cross-border and domestic mergers and acquisitions, divestitures, joint ventures, global corporate reorganizations, securities and capital markets. Zahi also advises clients on a broad range of technology and media-related matters including cloud computing, data centers, e-commerce/payment solutions and navigating the regulatory landscape in the Kingdom.

Author

Christiana O'Connell-Schizas is a senior associate of Legal Advisors Abdulaziz Alajlan & Partners in association with Baker & McKenzie Limited. She joined the firm at the beginning of 2014 and is actively involved in advising both Saudi Arabian and foreign clients on a wide range of corporate, commercial and employment matters and M&A transactions.

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