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The Kingdom of Saudi Arabia introduces new work visa
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As employers in the Kingdom of Saudi Arabia (KSA) will be aware, the KSA Ministry of Human Resources and Social Development (MHRSD) has sought to digitise its services and interactions with employers; latterly through the development of electronic portals of which there are two main ones: Qiwa and Mudad.
Since 23 April 2019, the MHRSD has required employers to put in place an electronically generated and authenticated employment contract (with the deadline being linked to headcount and the final deadline for compliance being 23 April 2020). Initially, these contracts were generated through the Mudad platform which was directly linked to the General Organisation for Social Insurance (GOSI), leading many to call these ‘GOSI contracts.’ However, from 12 May 2022, these electronic contracts must be generated through the Qiwa platform, a move which has resulted in some changes and evolution of the system which we describe below. Both Saudi and non-Saudi employees must have Qiwa generated and registered employment contracts.
Access to the Qiwa portal can be found here, and the services include:
Every employer is able to access their establishment information through this platform. The Qiwa dashboard (or first page on log in) shows key information including the company’s establishment information (e.g., size, economic activity as registered with MHRSD), Nitaqat rating (number of Saudi nationals, number of foreign nationals and Saudisation percentage achieved), and balance details (total headcount, ending visa transfers, Ajeer employees (see below), and unusual visa count). It also shows the Saudisation certificate validity period.
When an employee is registered with the authorities as an employee the employer must generate an electronic contract which is composed of three sections: a) compulsory clauses (these clauses cannot be amended and the employer enters the key details such as the name, address, remuneration, working hours and so on); b) optional clauses; and c) additional clauses.
Under optional clauses, an employer can include a pre-set number of clauses which include the following three clauses: a) confidentiality; b) restrictive covenants; and c) agreed compensation for termination for an invalid reason.
The option to add additional clauses is a new feature which was added very recently, as previously it was not possible for an employer to include any new provisions. Under the additional clauses section, an employer can add free standing text as it wishes with each clause being up to 1000 letters.
Once the contract is generated, the employee is sent a link to the electronically generated contract and if the employee accepts the contract, the employee is required to click on such option.
Given that electronic contracts are generated when the individual is being registered as an employee, an employer will likely still need to issue its own documentation for offering employment to new recruits and also confirming their terms and conditions of employment. As can be seen from our description of the electronic contract, there is a limitation on the number of clauses and the detail in which these can be drafted. It is, therefore, highly likely that employers across industries will continue to issue their own contracts in which case the status of these contracts becomes an open debate.
In putting in place the electronic authentication process, the MHRSD has clearly indicated an intention for these contracts to be the operative agreement between an employer and employee. However, it has also recognised that the situation is in flux and the Labour Courts are continuing to take into account all evidence indicating the employment relationship as well as its terms and conditions which they are bound to do under the Labour Law.
If you would like more information on electronic employment contracts through Qiwa, please contact us.