Article 55 of the Saudi Labor Law is a significant cornerstone regulating the relationship between employees and employers, particularly regarding fixed-term contracts. It stipulates the rules concerning contract termination and renewal, providing a legal framework that protects the rights of both parties.
Article 55 sets the legal foundation for fixed-term contracts, clarifying when they apply, how they can be renewed, and the transition to indefinite contracts under specific conditions.
Firstly, upon the expiration of a fixed-term contract, the first clause allows for mutual agreement to renew the contract for an indefinite period. This reflects the legislature's intent to promote the continuity of the employment relationship, encouraging stability and consistency in the workplace.
Fixed-term contracts must clearly state their duration. If renewed multiple times without changes, they may automatically convert into indefinite contracts.
If a fixed-term contract is renewed twice or if the employee continues working beyond the contract term without renewal, it is considered indefinite.
Employers must communicate contract renewal terms. If a contract is not renewed, employees should receive notice within the required legal timeframe.
Ensuring contracts comply with Saudi labor laws.
Providing all agreed-upon benefits and compensations.
Right to fair treatment under contract terms.
Right to dispute unfair terminations or contract changes.
Secondly, if the fixed-term contract includes a provision for renewal for a similar or specified duration, the second clause dictates that the contract shall be renewed for the agreed-upon period. This means that if there is a clear provision in the contract regarding renewal, both parties are obligated to adhere to it.
Fixed-term contracts may include salary reviews, bonuses, and additional benefits based on company policies and labor law requirements.
It is also noteworthy that if the contract is renewed three consecutive times or if it continues, including renewals, for a total of four years, the contract transforms into an indefinite-term contract. This reflects the legislature's aim to provide a mechanism to ensure the rights of both parties in cases of long-term employment without a definitive duration.
In summary, Article 55 of the Saudi Labor Law serves as an important legal framework regulating employment relationships and safeguarding the rights of both employees and employers regarding fixed-term contracts, thereby enhancing stability and confidence in the labor market.
No, after multiple renewals, it may automatically convert into an indefinite contract.
The employer must provide notice; otherwise, the employee may seek legal action.
Yes, employees have the right to negotiate new contract terms.
Yes, service length impacts benefits, and renewal extends employment duration.
Visa status and residency permits must align with contract terms to maintain legal status.
February 25, 2024
- بواسطة Sultan Alqahtani
