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.
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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
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
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
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