In the Kingdom of Saudi Arabia, the ability of expatriates to transfer jobs has always been an area of contention. Historically, expats were required to complete a full year of service for their initial employer before they could transfer to another job as part of a set of regulations aimed at controlling the labor market, reducing employee turnover, and reducing the potentiality of losses incurred by businesses.
However, there have been significant legal changes by the Human Resources and Social Development Ministry regarding these rules. The current law now allows expatriates to transfer jobs before completing one year of service. As per the updated regulations, an expatriate can even transfer the very next day (provided the current employer consents)! However, this change comes with specific conditions in order to balance the businesses’ profitability and the freedom of the workers.
The updated framework now provides several scenarios under which job transfers are allowed:
- Employer Consent: At the point at which the current employer consents to the transfer, an expat can switch jobs without any time limitations
- Contract Completion: At the point at which a contract is completed, ex-pats can transfer to a new job without needing any permission from the current employer
- End of the Contract without Employer’s Consent: Expats can transfer before their contract is performed fully if:
- 12 months have passed since their arrival in Saudi Arabia, and a three-month notice is provided before the transfer
- A contract is terminated under Article 77 of the Saudi Labor Law, which requires the terminating party to provide compensation if either party terminates the contract for an invalid reason.
These adjustments are made primarily to align with Vision 2030 and its goal to create a more competitive job market and a freer market economy. The reforms aim to attract a greater pool of global talent and provide them with greater opportunities for mobility and good working conditions.
It also reflects the government’s efforts to balance the rights of both employer and employee and limit harmful consequences of power imbalances. This is one of the many coming labor reforms intended to progress the work environment to the age of modernity and compete with international working standards to attract more global talent.
However, it can cause difficulties if the process is not navigated with care. One such example is that if an expat resigns under Article 77, they may be asked to pay salaries equivalent to the remaining period of the contract. To undertake this as an expat is an arduous job and not a decision that can be taken lightly. Ultimately, the smooth upward progression of the business must be balanced against the ease afforded to expats to ensure that an unfair advantage is not granted.
Moreover, despite the relaxation in the previously stringent regulations, the necessity of ensuring a smooth legal and bureaucratic process is essential to avoid future complications. This means ensuring all paperwork is up to date and in order, adhering to any notice periods and employment clauses, and complying strictly with the conditions set out for lawful transfers.
In conclusion, despite the progressive move towards a more relaxed set of labor laws, the process to avail of these benefits remains stringent and difficult in order to allow only genuine cases of difficulty to find relief instead of offering a broad loophole to be taken advantage of. This allows the government to balance the interests of both the business and the labor force and allows for a more dynamic, competitive, and fair labor market.
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