Most of the provisions dealing with labor law and employee’s rights are included in the Labor and Workmen’s Regulations of 1969. The establishment of labor unions is prohibited and basically there is no collective labor law in the Kingdom.
The regulations provide for enforcement of employee’s rights, record-keeping and reporting, protection of women and children, inspection of places of work provision of medical and other facilities, etc. Labor benefits are mandatory and may not be waived.
According to the regulations, every employee is entitled to a written employment contract, although an employment contract does not necessarily have to be in writing in order to be valid.
With minor exceptions, the maximum work week is eight hours per day for a six day week. During the month of Ramadan, the maximum work week decreases to thirty-six hours.
The Saudi Labor Regulations distinguish between specified and unspecified term contracts. If the employment relationship is for a specified period, the employee may only be terminated “for cause” as defined in the Regulations, which usually means a fundamental breach of the employment contract by the employee. If the employment contract states no specific term then the worker may be terminated for a valid reason only, which does not reach to the level of “cause”. In all cases, the employee must be given a requisite statutory termination notice.
Saudi labor laws ensure preferential treatment for Saudis in hiring over equally qualified foreign nationals, mandating that three-quarters of every employer’s work force must consist of Saudis and that no less than 51 percent of the employers’ total payroll be paid to Saudis.