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KSA Ministry of Human Resources to liberalise sponsorship system from March 2021

  • Legal Development 6 December 2020 6 December 2020
  • Middle East

  • Employment, Pensions & Immigration

The recent announcement by the Kingdom of Saudi Arabia (KSA) Ministry of Human Resources and Social Development (MHRSD) sees a change for employment mobility and the process for exit and re-entry permits. This article examines how the new rules will allow for greater transparency, labour mobility and ultimately a more robust labour market from March 2021.

Currently as employers are aware, a key feature of the employment relationship in the GCC region is a requirement for the employer to act as the sponsor of an employee for work and residency purposes. In KSA, there remains a requirement for individuals to also hold exit and re-entry visas each time they leave and re-enter the Kingdom and employers have been authorised to approve the transfer of an employee's visa to a new employer entirely at their discretion.  
 

What is changing?

Employment mobility

  • Under the scheme, foreign national employees will be permitted to transfer employment between private sector entities without requiring the consent of their current employer.
  • In order to be eligible, the employee is required to:
    • have completed at least one year with his / her current employer;
    • have in place an attested employment contract with their existing employer;
    • have their job offer from the new employer registered on the MHRSD's portal "Qiwa" system by  the new employer; and
    • ensure their notice has been correctly served on their existing employer and observed prior to transferring.
  • In order to be eligible, the new employer is required to adhere to the following requirements:
    • be eligible to apply for additional visas;
    • be compliant with the wage protection system;
    • be in compliance with the Contract Digital Documentation Programme; and
    • be in compliance with the self-evaluation programme set by the MHRSD.
  • There are 8 instances where exceptions to the above employee and employer requirements will be accepted which are centred around the employer's actions.  These include; not having in place an attested employment contract, non-payment of the employee's salary for three consecutive months, employer's absence, expiry and non-renewal of the employee's work permit and residency visa, exposing a commercial cover-up by the employer, human trafficking instances, where there is a dispute between the parties, or simply when the current employer consents to the transfer.
  • The transfer is requested through the "Qiwa" system.

Exit and re-entry permit

  • Under the scheme, foreign national employees will be permitted to directly request their exit and re-entry permits in and out of the Kingdom whilst employed, without requiring the assistance of their employer.
  • In order to be eligible, the employee must:
    • have in place an attested employment contract;
    • have a valid residency visa;
    • have no unpaid governmental fees or violations;
    • pay a service charge for the service; and
    • confirm through the portal his / her agreement to measures which may be taken by the employer in the event the employee fails to return.
  • The employer will be notified electronically of the employee's departure.
  • This service is available through the Absher platform.

Final exit permit

  • This service permits foreign national employees to apply for their final exit permit whilst employed or on expiry of their employment contract, without requiring the assistance of their employer.
  • In order to be eligible the employee must:
    • have in place an attested employment contract;
    • have a valid residency visa;
    • have no unpaid governmental fees or violations; and
    • confirm through the portal his / her agreement to measures which may be taken by the employer in the event the employee has exited the country and failed to complete their employment contract term.
  • The employer will be notified electronically of the employee's departure.
  • This service is available through the Absher platform.
     

When are the changes expected to come into force?

The MHRSD has issued a guide setting out the above changes and conditions, and has advised that the enhancement programme will come into effect in March 2021.
 

What impact will the changes bring?

The current system requires the employer to approve or apply for the above mentioned services.  Whilst this places control with the employer, it also administratively burdens employers and can lead to disputes arising between the parties.  The proposed changes will alter this position and allow control to sit with employees, subject to the conditions set out above being complied with.  Employers do need to be aware that they will likely need to have more robust employment contracts to regulate post termination issues such as confidentiality and non-compete provisions as employees will be able to more readily change jobs and employers.

For more information, please contact Sara Khoja.

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