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Standard Employment Agreement Template for Saudi Arabia

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Standard Employment Agreement

"I need a Standard Employment Agreement for hiring a senior software developer in Riyadh, with an expected start date of March 1, 2025, including provisions for remote work and intellectual property protection for a technology company."

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What is a Standard Employment Agreement?

The Standard Employment Agreement serves as a foundational document for establishing formal employment relationships in Saudi Arabia. It is designed to comply with the Saudi Labor Law (Royal Decree No. M/51), associated ministerial decisions, and Sharia principles, while incorporating modern employment practices and recent reforms in Saudi labor regulations. This agreement is suitable for both Saudi nationals and expatriate workers, covering essential aspects such as terms of employment, compensation, benefits, and termination procedures. It includes provisions for Saudization compliance and social insurance requirements, making it particularly relevant for companies operating in the Kingdom. The document can be customized for various position levels while maintaining compliance with mandatory legal requirements.

What sections should be included in a Standard Employment Agreement?

1. Parties: Identification of the employer and employee, including full legal names, addresses, and relevant identification numbers

2. Background: Brief context of the employment relationship and purpose of the agreement

3. Definitions: Key terms used throughout the agreement

4. Appointment and Duration: Position title, employment status (definite/indefinite term), and commencement date

5. Duties and Responsibilities: Detailed description of the employee's role, responsibilities, and reporting structure

6. Place of Work: Primary workplace location and potential for relocation or travel

7. Working Hours and Days: Standard working hours, days, breaks, and overtime provisions as per Saudi Labor Law

8. Compensation and Benefits: Base salary, allowances, bonuses, and other benefits including GOSI contributions

9. Leave Entitlements: Annual leave, sick leave, Hajj leave, and other statutory leave entitlements

10. Probationary Period: Duration and terms of the probationary period as per Saudi Labor Law

11. Confidentiality: Protection of company information and trade secrets

12. Termination: Grounds and procedures for termination of employment

13. End of Service Benefits: Calculation and payment of end of service gratuity

14. Governing Law: Confirmation of Saudi Law application and Sharia compliance

15. Dispute Resolution: Process for resolving employment-related disputes

What sections are optional to include in a Standard Employment Agreement?

1. Non-Competition: Restrictions on post-employment competition, used for senior positions or roles with access to sensitive information

2. Intellectual Property Rights: IP ownership provisions, relevant for technical or creative roles

3. Remote Work Provisions: Specific terms for remote working arrangements, if applicable

4. Commission Structure: Detailed commission calculations for sales or similar roles

5. International Assignment Terms: Additional terms for expatriate employees or international assignments

6. Training Obligations: Specific training requirements and associated commitments

7. Vehicle Allowance: Terms related to company vehicle or transport allowance

8. Housing Provisions: Terms related to housing allowance or company-provided accommodation

What schedules should be included in a Standard Employment Agreement?

1. Schedule 1 - Job Description: Detailed description of role, responsibilities, and performance expectations

2. Schedule 2 - Compensation Details: Breakdown of salary components, allowances, and benefits

3. Schedule 3 - Company Policies: Key company policies including code of conduct, IT usage, and harassment policies

4. Schedule 4 - Performance Metrics: KPIs and performance evaluation criteria

5. Appendix A - Required Documents: List of required documents for employment (qualifications, certificates, etc.)

6. Appendix B - Benefits Summary: Detailed overview of all employee benefits and eligibility criteria

Authors

Alex Denne

Head of Growth (Open Source Law) @ 黑料视频 | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

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