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Renewal Of Employment Contract for Saudi Arabia

Renewal Of Employment Contract Template for Saudi Arabia

A Renewal of Employment Contract under Saudi Arabian law is a formal agreement that extends an existing employment relationship between an employer and employee. The document must comply with the Saudi Labor Law (Royal Decree No. M/51) and related ministerial resolutions, incorporating any updates to terms and conditions while maintaining consistency with Sharia Law principles. It addresses key employment aspects including duration of renewal, compensation, benefits, working conditions, and any modifications to the original employment terms, while ensuring adherence to local labor regulations, Saudization requirements, and social insurance obligations.

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What is a Renewal Of Employment Contract?

The Renewal of Employment Contract is a essential document used in Saudi Arabia when an employer wishes to extend an existing employment relationship beyond its initial term. It serves as a formal agreement that confirms the continuation of employment while potentially updating terms and conditions to reflect current circumstances. This document is particularly important in the Saudi Arabian context due to specific requirements under the Saudi Labor Law regarding contract renewals, notice periods, and employee rights. It must incorporate various regulatory considerations including Saudization policies, GOSI requirements, and Wage Protection System compliance. The renewal contract typically references the original employment agreement while clearly stating any modifications to terms such as compensation, benefits, or job responsibilities. It's commonly used for both Saudi nationals and expatriate workers, requiring careful attention to visa and work permit regulations for foreign employees.

What sections should be included in a Renewal Of Employment Contract?

1. Parties: Identification of the employer and employee with full legal names and details

2. Background: Reference to the original employment contract, its date, and the parties' intention to renew

3. Definitions: Key terms used in the renewal agreement including references to the original contract terms

4. Term of Renewal: Specific duration of the renewal period and effective date

5. Continuation of Employment: Confirmation that employment continues under the original contract terms except as modified

6. Compensation and Benefits: Updated salary, allowances, and benefits applicable during the renewal period

7. Working Hours and Location: Confirmation or modification of working hours, days, and place of work

8. Leave Entitlements: Vacation, sick leave, and other leave entitlements during the renewal period

9. Performance Review: Schedule and criteria for performance evaluation during the renewed term

10. Termination Provisions: Conditions and process for termination during the renewal period

11. Governing Law: Confirmation of Saudi Labor Law application and jurisdiction

12. Signatures: Execution block for both parties including date and place of signing

What sections are optional to include in a Renewal Of Employment Contract?

1. Modified Terms: Section detailing any specific changes from the original contract terms, used when there are substantial changes to employment conditions

2. Training Requirements: Specific training or development requirements during the renewal period, included when new skills or certifications are required

3. Non-Compete Clause: Restrictions on post-employment competition, included for senior positions or when dealing with sensitive information

4. Confidentiality Provisions: Enhanced confidentiality requirements, included when dealing with sensitive information or senior positions

5. Performance Targets: Specific performance goals and metrics, included when renewal is performance-based

6. Remote Work Provisions: Terms for remote working arrangements, included when applicable to the role

7. International Assignment Terms: Specific provisions for international assignments, included for expatriate employees

What schedules should be included in a Renewal Of Employment Contract?

1. Schedule A - Compensation Details: Detailed breakdown of salary, allowances, and benefits

2. Schedule B - Job Description: Updated detailed description of role and responsibilities

3. Schedule C - Performance Metrics: Specific KPIs and performance evaluation criteria

4. Appendix 1 - Original Contract Reference: Copy or summary of key terms from the original employment contract

5. Appendix 2 - Company Policies: Updated applicable company policies and procedures

6. Appendix 3 - Benefits Summary: Detailed description of all applicable benefits and entitlements

Authors

Alex Denne

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

Jurisdiction

Saudi Arabia

Publisher

Ƶ

Document Type

Employment Letter

Cost

Free to use
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