KEY DEVELOPMENTS FOR 2017
Saudi nationals given additional protections in the private sector
It is expected that the trend towards increased Saudisation in the private sector will continue into 2017. The Ministry of Labour is due to implement a new version of the Saudisation program called ‘Mawzoom’ with the aim of increasing employment rate, helping Saudis to get high-salaried jobs, increasing the number of female workers in companies and ensuring job stability for Saudis. For all employers, the emphasis will shift from simply counting the numbers of Saudis employed to also considering other factors, such as the average salary paid to Saudi employees, the percentage of women employees, time spent in employment, and the percentage of Saudis employed in the highest salary bracket in the organisation.
The KSA government has also been considering steps to limit the number of work visas granted or renewed for expatriates. In October 2016, the Ministry of Civil Service did not renew 478 visas for expatriates working at King Saud University (who had spent more than 10 years in their position). The Ministry has suggested that it is considering counting expatriate workers aged 60 or above as two workers for the purposes of Saudisation and this proposal could be implemented in 2017.
Finally, as part of Vision 2030 announced in the second half of 2016, the KSA government proposed introducing a green card system for expatriates. There is a possibility that this could be introduced in 2017, but it seems unlikely.
KEY DEVELOPMENTS FOR 2016
Extension of wage protection scheme
In February 2016, the Wage Protection Scheme (“WPS”) was extended to employers with 11 to 100 employees. The WPS system makes it mandatory for employers to transfer salaries into employee’s accounts and ensure that employees are being paid in a timely manner and as agreed upon in their employment contracts. It is being rolled out in Saudi Arabia in phases.
Saudisation in telecommunication industry
Resolution No. 1592 was announced in March 2016 and stated that all work in the activity of the sale and maintenance of mobile phone devices and accessories would be restricted to Saudi nationals. Employers in the mobile phone industry needed to replace 50% of their expatriate employees with Saudi national employees by 6 June 2016. By 3 September 2016, employers in the mobile phone devices and accessories market had to have a 100% Saudi national workforce.
Various legislative changes impacting employment contracts and the disabled
Temporary employment contracts that continue beyond 90 days will become permanent employment contracts (subject to all provisions of the labour law).
There is also a standard form employment contract which contains obligatory clauses to be included in all employment contracts.
Additional changes include the ability to extend probationary periods, the maximum overtime hours which can be worked each year (limited to 720 except where employee agreement has been obtained), provisions relating to sick leave whilst employees are on annual leave, and provisions relating to expatriates and sponsorship.
Employers must not retain the passport of non-Saudi workers without written consent.
Additional protections for disabled persons, including requirements in respect of working conditions, facilitating access and the right to request modifications to enable disabled persons to perform the duties of their role.
With thanks to Gordon Barr and Zahir Qayum of Al Tamimi & Company for their invaluable collaboration on this update.