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Contract Renewal Letter for Saudi Arabia

Contract Renewal Letter Template for Saudi Arabia

A Contract Renewal Letter is a formal document used in Saudi Arabia to extend an existing employment relationship between an employer and employee. The document must comply with Saudi Labor Law (Royal Decree No. M/51) and related ministerial resolutions, incorporating necessary elements such as employment terms, duration of renewal, and any modifications to existing conditions. It serves as a legally binding document that confirms the continuation of employment while ensuring compliance with local labor regulations, Sharia Law principles, and if applicable, Saudization requirements for foreign workers.

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What is a Contract Renewal Letter?

The Contract Renewal Letter is a crucial document used when an employer wishes to extend an existing employment relationship in Saudi Arabia. It is typically issued before the expiration of the current contract term and must align with Saudi Labor Law requirements and Sharia Law principles. The document serves multiple purposes: it confirms the continuation of employment, specifies any changes to existing terms, ensures legal compliance, and provides documentary evidence of the renewed employment relationship. The letter should be drafted in accordance with Ministry of Human Resources and Social Development guidelines and must include essential elements such as renewal duration, terms and conditions, and any modifications to the existing contract. For foreign workers, additional considerations regarding Iqama (residence permit) renewal and Saudization requirements must be addressed.

What sections should be included in a Contract Renewal Letter?

1. Letter Header and Date: Official letterhead, date, and reference number of the original contract

2. Employee Information: Full name, employee ID, current position, and department of the employee

3. Renewal Statement: Clear statement of intent to renew the employment contract, including the renewal period

4. Current Terms Confirmation: Reference to continuing terms and conditions from the original contract

5. Effective Date: Specific date when the renewal takes effect

6. Acknowledgment and Signature Blocks: Space for both employer and employee signatures, as required under Saudi Labor Law

What sections are optional to include in a Contract Renewal Letter?

1. Terms Modifications: Section detailing any changes to existing terms (salary, benefits, position) - include only if there are changes

2. Iqama Details: For expatriate employees, include residence permit (Iqama) details and renewal requirements

3. Performance Recognition: Optional section acknowledging employee's performance - useful for positive reinforcement

4. Compliance Declaration: Statement confirming compliance with Saudization requirements - needed for foreign workers

5. Notice Period: Include if there are any changes to the standard notice period requirements

What schedules should be included in a Contract Renewal Letter?

1. Schedule of Updated Terms: Detailed list of any modified terms and conditions, if applicable

2. Benefits Summary: Current or updated benefits package details, if changes are made

3. Required Documentation Checklist: List of documents needed for the renewal process, especially relevant for expatriate employees

4. Ministerial Approval Documents: Any required government approvals or declarations, particularly for foreign workers

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Saudi Arabia

Publisher

Ƶ

Document Type

Service Letter

Cost

Free to use
Relevant legal definitions




















Clauses




















Relevant Industries

Banking & Financial Services

Construction & Engineering

Healthcare

Manufacturing

Oil & Gas

Technology & IT

Retail & Consumer Goods

Education

Professional Services

Telecommunications

Transportation & Logistics

Hospitality & Tourism

Relevant Teams

Human Resources

Legal

Compliance

Personnel Administration

Employee Relations

Talent Management

HR Operations

Corporate Services

Relevant Roles

HR Manager

Legal Counsel

HR Director

HR Administrator

Legal Manager

Compliance Officer

HR Business Partner

HR Specialist

Employment Law Specialist

Talent Management Manager

HR Operations Manager

Personnel Manager

Industries






Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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