Fixed-Term Contracts in Saudi ...

Article 55 of the Saudi Labor Law is a significant cornerstone regulating the relationship between employees and employers, particularly regarding fixed-term contracts. It stipulates the rules concerning contract termination and renewal, providing a legal framework that protects the rights of both parties.

Firstly, upon the expiration of a fixed-term contract, the first clause allows for mutual agreement to renew the contract for an indefinite period. This reflects the legislature's intent to promote the continuity of the employment relationship, encouraging stability and consistency in the workplace.

Secondly, if the fixed-term contract includes a provision for renewal for a similar or specified duration, the second clause dictates that the contract shall be renewed for the agreed-upon period. This means that if there is a clear provision in the contract regarding renewal, both parties are obligated to adhere to it.

It is also noteworthy that if the contract is renewed three consecutive times or if it continues, including renewals, for a total of four years, the contract transforms into an indefinite-term contract. This reflects the legislature's aim to provide a mechanism to ensure the rights of both parties in cases of long-term employment without a definitive duration.

In summary, Article 55 of the Saudi Labor Law serves as an important legal framework regulating employment relationships and safeguarding the rights of both employees and employers regarding fixed-term contracts, thereby enhancing stability and confidence in the labor market.