Saudi Arabia to issue executive regulations on labor reform soon

RIYADH — The Ministry of Human Resources and Social Development will soon issue executive regulations for the landmark labor reform initiative announced by the ministry recently, according to a senior ministry official.

Sattam Al-Harbi, deputy minister for inspection and work environment development, said that the initiative is in continuation of the ministry’s previous efforts to improve the labor market to keep pace with with the robust economic development being witnessed by the Kingdom.

He made the remarks on Wednesday while addressing a virtual workshop organized by the Riyadh Chamber of Commerce and Industry, in cooperation with the Ministry of Human Resources and Social Development, to shed more lights on the initiative and its diverse implications. The chamber was represented by its Human Resources and Labor Market Committee in organizing the event.

The ministry launched the labor reforms initiative on Nov. 4, revamping the 70-year old sponsorship system. The initiative allows enhanced job mobility and regulates the issuance of exit and re-entry visa and final exit visas without the consent of the employer. It applies to all expatriate workers except five categories, such as private driver, home guard, domestic worker, shepherd and gardener or farmer in the private sector.

Al-Harbi said the labor reform initiative seeks to raise the attractiveness of the labor market and the ministry has benefited from international experiences in preparing the initiative. “The ministry made elaborate discussions on various aspects of the reforms and held meetings with more than 700 employers to take their views on it so as to further improve the contractual relationship between employers and employees in a way safeguarding the rights of both parties in line with the labor contracts,” he said.

Al-Harbi said that the initiative will come into force in the private sector establishments on March 14, 2021, pointing out that the initiative includes three main services — job mobility, issuance of exit and re-entry visa, and final exit visa. It is expected that the initiative would be producing positive economic impact in terms of the flexibility and development of the labor market, and contribute to achieving the goals of the Kingdom’s Vision 2030 in developing human competencies and work environment.

Al-Harbi reviewed the implementation mechanism and conditions for the three major services included in the initiative. “The new initiative allows the employment mobility service for an expatriate worker to transfer to another job upon the expiry of his work contract without the need for the employer’s consent. The exit and reentry service allows the expatriate worker to travel outside the Kingdom with submitting the application along with informing the employer about it electronically, while the final exit visa service enables the expatriate worker to leave the Kingdom during the valid period of the work contract or immediately after its termination in addition to the possibility of leaving the Kingdom with the worker bearing all the consequences of the termination of the contract, he added.

In his speech, Eng. Hani Al-Mojil, deputy minister for labor policies, said that the initiative aims to raise the competitiveness of the labor market. “There will be reviews of the provisions of the Labor Law with holding meetings with employers to know their views. The initiative was prepared after holding many meetings with the stakeholders in the private sector and based on studies and research that included international best practices in this field,” he said.

On his part, Eng. Mansour Al-Shathry head of the Human Resources and Labor Market Committee at the Riyadh Chamber, said that organizing the workshop comes within the framework of partnership between the ministry and the chamber, with the aim of shedding light on the new regulations and decisions related to the labor market. “The initiative seeks to improve the work environment and open new fields for competent Saudis,” he said while stressing the need to implement the three services in a manner that guarantees the rights of all parties.

The workshop discussed the mechanisms for implementing the three services and their implications for employers, especially related to payment of compensation, permitting the mobility of workers, in addition to the need to set standards for a flawless exit and reentry visa service, and keeping the establishment’s secrets in line with Article 83 of the Labor Law.