Saudi Arabia: Sponsorship reforms cut labour disputes by 50%

Abu Dhabi: Saudi Arabia’s reforms to sponsorship – or kafala – system, allowing for job mobility among expatriate workers, have reduced labour disputes by 50 per cent, a senior official said.

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The reforms, which became effective in March, removed several limitations on foreign workers in an overhaul of the country’s labour policies.

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Suleiman Al Dafas, Head of the Labour Executive Court in Riyadh, said the reforms contributed to improving the labour relationship between workers and employers, which was reflected in 50 per cent decrease in disputes submitted to the labour courts.

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Al Dafas told Al Arabiya TV, “Saudi Arabia has taken many measures that positively affected the labour market, eased the work of the labour courts and improved the relationship between workers and employers.

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Announced in November last year by the Kingdom’s Ministry of Human Resources and Social Development, the changes are largely viewed as part of Saudi Arabia’s plan to increase foreign talent and increase job market mobility for some 10.5 million foreign workers in the kingdom, who make up about a third of its population.

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Under the new labour law, expat workers can change jobs once their current contract is completed without the need for their former employer’s approval. It also outlines transition mechanisms while the contract is still active on the condition that the notice period and the specified controls are adhered to.

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Expat workers no longer need prior permission from their employer to exit and enter the country under the new reforms and can do so by submitting an application with an online notification to the employer.

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A final exit stipulation, where a foreign employee is leaving the country for good, will allow that employee to leave directly after the end of their contract by sending an online notification to their employer without requiring consent.

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The reforms also address exceptional cases where workers were not provided with a work contract or did not receive their salaries.

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Prior to the reforms, foreign workers in Saudi Arabia needed to be tied to a sponsor, whose permission they needed to change jobs, open a bank account or leave the country on vacation.

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