Saudi Arabia has introduced a major update to its Labour Law, approved by the Council of Ministers and announced by the Ministry of Human Resources and Social Development (HRSD). These changes are part of the Kingdom’s Vision 2030 strategy to modernize its labour market, improve job stability, and enhance the rights of both employers and employees. The amendments affect 38 existing articles, remove 7, and add 2 new ones—marking one of the most comprehensive reforms in recent years.
Clarifying Key Employment Terms
One of the key updates is the clarification of terms such as “resignation” and “assignment,” which have long been sources of confusion in employment contracts. These definitions are now more precise, helping employers and HR teams avoid misinterpretation and legal ambiguity. The HRSD confirmed that the amendments would begin implementation immediately following their publication.
The Grievance Process
The grievance process has been restructured to give workers more transparent and accessible ways to raise concerns. This change is designed to reduce bureaucratic delays and improve procedural fairness across workplaces, strengthening labour rights.
Mandatory Training and Development Policies
A significant shift is the requirement for employers to implement formal training and qualification policies. Previously, employers were expected to “prepare” Saudi employees; now, they must “develop a policy to train and qualify” them. This reflects a more structured approach to workforce development.
Small and Medium Enterprises
SMEs are also a focus of the reforms. The amendments include provisions aimed at supporting SMEs in creating more job opportunities for Saudi nationals, aligning with the country’s Saudization goals.
The Maritime Sector
The maritime sector has received special attention, with substantial revisions to its regulatory framework. Given Saudi Arabia’s strategic coastline and growing logistics infrastructure, these changes highlight the government’s intent to strengthen the sector’s role in national development.
Broad Stakeholder Consultation
These reforms were developed through extensive consultation with over 1,300 stakeholders, including private sector representatives, government entities, and legal experts. The HRSD conducted surveys, workshops, and meetings to ensure the amendments reflect both international best practices and local market needs.
Compliance Timeline
The new reforms are expected to take effect 180 days after publication in the official gazette. This timeline allows employers to prepare for compliance and adapt policies accordingly. The amendments are more than an administrative update—they represent a strategic move in how Saudi Arabia approaches future employment, aligning with the Kingdom’s Vision 2030 ambitions to create a more competitive and dynamic labour market.
Leap29 Perspective
“Saudi Arabia’s latest labour law reforms are among the most comprehensive we’ve seen in the region, signalling a clear commitment to Vision 2030 goals. By clarifying key employment terms, strengthening grievance procedures, and mandating structured training policies, the Kingdom is building a more transparent, skilled and competitive labour market. For employers, the next 180 days are critical—those who prepare early will be best placed to adapt, remain compliant, and contribute to Saudi Arabia’s long-term growth agenda.”
— Simon Duff, Director, Leap29.
