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Initiative to Improve Contractual Relationship

Important Action by Regulatory Agency

Authors: Sara Khoja, Partner and Sarit Thomas, Attorney-at-Law – Clyde & Co.

The Ministry of Human Resources and Social Development (MHRSD) has launched an initiative to improve contractual relationships. As part of the initiative, MHRSD proposes three main objectives. Concerning contractual arrangements, the MHRSD proposes to abolish the requirement for employees to obtain existing employer's approval to transfer to a new employer. Under the changes to the Exit and Re-Entry Visas program, foreign national employees will no longer require permission from their Saudi employer to exit and re-enter the country, employers will be notified electronically on departure. Lastly, concerning final exit visas, foreign national employees will no longer require their employer's consent to obtain a final exit visa to leave the country after termination of their employment. The employer will be notified electronically, and the employee will absorb any consequences pertaining to terminating the contractual relationship. The reforms are due to come into effect on March 14, 2021.