Training Contract

What a training contract is

A training contract, in the Saudi Labor Law (نظام العمل) the qualification and training contract (عقد التأهيل والتدريب), is defined in Article 45 of the Labor Law as a contract under which the employer undertakes to qualify or train a person in order to prepare that person for a particular occupation.

عقد التأهيل والتدريب عقد يلتزم بمقتضاه صاحب العمل بتأهيل أو تدريب شخص لإعداده في مهنة معينة.

That is the Arabic text of Article 45 of the Labor Law; the English above is our rendering of it, not an official translation.

Two limits sit in the wording of that one sentence. What the employer undertakes is to qualify or to train, not to receive work. And the other party is a person, not a worker (عامل). Someone trained under this contract is therefore not an employee of the employer, and the rest of the subject follows from that point. How the Labor Law treats a person according to status is set out under employment status.

Paragraph 4 of Article 5 of the Labor Law brings qualification and training contracts with persons who are not the employer’s workers within the scope of the Labor Law, but only within the limits of the special provisions the Labor Law sets for them. Those special provisions are the second chapter of Part Four of the Labor Law (الباب الرابع), Articles 45 to 49 of the Labor Law. Articles 16 bis (1), 16 bis (2) and 17 of the Implementing Regulation (اللائحة التنفيذية) implement that chapter.

In the sources we reviewed, we found no age set for a trainee under a qualification and training contract. The rules on employing young persons (الأحداث) in Part Ten of the Labor Law have their own provisions, and no age for a trainee is drawn from the definition of a training contract.

The training contract within Part Four of the Labor Law

Part Four of the Labor Law, headed training and qualification, has two chapters, and each addresses a different group of people:

• Chapter One, Articles 42 to 44 of the Labor Law. It concerns training and qualification for the employer’s own workers: a training policy and a training programme for a worker whose employment contract is in force.
• Chapter Two, Articles 45 to 49 of the Labor Law. It concerns the qualification and training contract with persons who are not the employer’s workers: a separate contract with a trainee who is not an employee. Paragraph 4 of Article 5 of the Labor Law refers to this chapter.

One error in this area is carrying a rule from one chapter into the other. Two provisions show how it happens, because at first sight they appear to conflict. Paragraph 7 of Article 15 of the Implementing Regulation requires that the trainee is not charged any expenses related to the training, while paragraph 2 of Article 48 of the Labor Law obliges a trainee who refuses a period of service to pay the costs of the training. There is no conflict between them. Article 15 of the Implementing Regulation implements Article 42 of the Labor Law, which sits in Chapter One and concerns the employer’s own worker. Article 48 of the Labor Law sits in Chapter Two and concerns a trainee who is not an employee. They are two provisions for two groups, not two rules for the same group.

What a training contract must state under Article 46 of the Labor Law

Article 46 of the Labor Law requires the training contract to be in writing and lists what it must specify:

• The type of occupation for which the training is contracted.
• The duration of the training and its successive stages.
• The skill the training is intended to develop.
• The amount of the reward (المكافأة) given to the trainee at each stage, which may not be set on the basis of piece or output.
• The rights and duties of the trainee and of the employer.
• Whether the training takes place in an establishment belonging to the employer or at another establishment.

The limit on the reward is part of the provision, not a comment on it. The reward is divided across the stages, and it is not built on piece or output, which is the basis of piece rate pay. A list of the particulars that leaves this limit out gives Article 46 of the Labor Law a meaning it does not have.

The third, fifth and sixth particulars were added by Royal Decree M/44, in force since 19 February 2025, so an earlier wording of Article 46 of the Labor Law is no guide to what a training contract must contain today.

A training contract is not an employment contract: the list in Article 49 of the Labor Law

Article 49 of the Labor Law names the provisions of the Labor Law that apply to the qualification and training contract, and it names them item by item:

• Annual leave and official holidays.
• The maximum working hours.
• Daily rest periods and the weekly rest.
• Occupational safety and health rules.
• Work injuries and their conditions.
• Whatever the Minister decides.

The list is closed by its own wording, and paragraph 4 of Article 5 of the Labor Law admits this contract only within the limits of the special provisions. The end of service award, the notice period, the termination provisions in Articles 74, 75 and 77 of the Labor Law and compensation for unfair dismissal are therefore not on the list, and they are not carried over to a training contract by analogy with an employment contract. A question that falls outside the list is answered from the special provisions themselves, not from the provisions of the other contract. The leave and hours that do carry over are covered in our guides to annual leave and to working hours and the weekly rest, and work injuries under work injury.

Article 6 of the Labor Law carries a different list for casual, seasonal and temporary workers. The two lists overlap but do not match, so neither is cited in place of the other.

Ending a training contract under Article 48 of the Labor Law

Paragraph 1 of Article 48 of the Labor Law gives both parties a right to end the contract, and the right comes with conditions that cannot be separated from it:

• The employer’s right. It arises where the employer establishes that the trainee lacks the aptitude or the ability to complete the programme usefully, on the basis of periodic evaluation reports prepared by the establishment providing the training or qualification. The reports are a condition written into the provision, and Royal Decree M/44 added them. Stating the right without the condition makes it wider than it is.
• The trainee’s right. The trainee, or the person under qualification, may also end the contract.
• A week’s notice at least. It is owed by whichever party wishes to end the contract, before the date set for ending it. It binds the employer and the trainee alike.
• Compensation. Neither party may claim compensation from the other unless the contract contains a provision to that effect. Compensation here depends on a term of the contract.

Royal Decree M/44 also changed who may end the contract on the trainee’s side. The earlier wording of Article 48 of the Labor Law gave the right to the trainee or to the trainee’s guardian or custodian, and the amendment removed the guardian and the custodian from the text. Article 44 of the Labor Law and Royal Decree M/44 are different things, so the one meant is named each time.

The first paragraph of Article 16 bis (2) of the Implementing Regulation, which implements Article 48 of the Labor Law, adds that where the contract provides for compensation, the employer may not end the training contract without compensating the trainee, unless the contract is rescinded during the training period in one of the cases in Article 80 of the Labor Law, other than its paragraph 6.

Service after a training contract, and the trainee’s way out

Paragraph 2 of Article 48 of the Labor Law allows the employer, once the period of training is complete, to require the trainee to work for the employer for a period equal to the training period. If the trainee refuses or declines to work that equal period, or part of it, the trainee must pay the employer the training costs the employer bore, or a share of them in proportion to the period remaining. Those two closing phrases carry the practical effect: a partial refusal brings the rule into play, and the amount is set against what remains of the period, not necessarily against the full cost. Royal Decree M/44 left this paragraph as it was. A worked example of the proportion is given under study sponsorship abroad, where paragraph 2 of Article 48 of the Labor Law reaches a sponsorship only where it is made under a qualification and training contract.

That obligation does not stand alone. The second paragraph of Article 16 bis (2) of the Implementing Regulation allows the trainee to end the training contract without paragraph 2 of Article 48 of the Labor Law applying at all, in three cases: the employer did not honour, during the training period, the trainee’s rights stated in the training contract; the employer did not enable the trainee to receive the training needed; or the trainee suffered behavioural abuse of any kind from the employer or from the establishment’s workers, without the employer or the employer’s representative taking the necessary action.

That way out carries a condition on the trainee as well: the trainee must notify the person responsible for training of the reason for ending the contract. The cost obligation and the way out are two halves of one rule. Citing the obligation without the way out, or the way out without the duty to notify, gives half of it.

The third paragraph of the same Article 16 bis (2) of the Implementing Regulation sets out three cases in which the trainee may be charged the training costs, or a share in proportion to the period remaining, unless the training contract provides otherwise:

• The trainee ends the training before its scheduled date without a legitimate excuse.
• The trainee refuses or declines to work the equal period, or part of it.
• The contract is ended under the first paragraph of Article 16 bis (2) of the Implementing Regulation, described above.

Training contracts for students and graduates

Article 47 of the Labor Law allows the Minister to require establishments to accept a set number or proportion of students and graduates of universities, colleges, institutes and centres, for training and to complete their practical experience, on the conditions and for the periods the Implementing Regulation sets. A training contract must then be concluded between the trainee and the employer, and the provisions of Chapter Two apply to it. The reference to universities, the referral of the conditions to the Implementing Regulation and the requirement of a training contract were all introduced by Royal Decree M/44.

The first paragraph of Article 16 bis (1) of the Implementing Regulation defines this group broadly: students and graduates of official educational institutions and of accredited colleges, institutes and training centres, whether or not they are seeking work. A trainee need not be a jobseeker to fall within it. In the text of the Labor Law and of its Implementing Regulation, we found no use of the label cooperative training (التدريب التعاوني). What Part Four of the Labor Law offers is this broad description of students and graduates, not any particular university programme. A graduate who trains through a Human Resources Development Fund product such as Tamheer is placed in the same chapter.

The second paragraph of Article 16 bis (1) of the Implementing Regulation places duties on the establishment, among them:

• A training contract stating the duration, the start and end dates, the occupation or skill, and the roles and responsibilities.
• A worker assigned responsibility for training activities.
• No training costs charged to the trainee.
• A training certificate showing the establishment’s name and location, the duration of the training, the occupation and skill, the year of training and the trainee’s overall assessment grade.
• No obligation on the trainee to work for the establishment after completing the training, unless the training contract provides otherwise.

The last of those duties reverses, for this group, the starting point in paragraph 2 of Article 48 of the Labor Law. There, the employer may require service after the training. Here, service is required only where the contract says so. Which group a trainee belongs to is settled before either rule is applied.

On the trainee’s reward, Article 46 of the Labor Law counts the amount of the reward among the particulars a training contract must specify, while Article 47 of the Labor Law says that the establishment may provide a reward to the trainee, and the Implementing Regulation repeats that wording for students and graduates. In the sources we reviewed, we found nothing that reconciles the two wordings, so we do not state that the reward is required or that it is optional. The contract and what the Ministry issues are the reference.

Training contract disputes and the labour courts

Article 17 of the Implementing Regulation provides that, in applying Article 49 of the Labor Law, the labour courts have jurisdiction over disputes that may arise from training and qualification contracts. A disagreement over a training contract therefore has a court to go to.

Chapter One duties that are not terms of a training contract

The duties below are owed by the employer to its own workers. They are not terms of a qualification and training contract, although they can be carried across to it in error:

• Article 42 of the Labor Law. Every employer puts in place a policy for training and qualifying its Saudi workers, in order to raise their skills and improve their level in technical, administrative, vocational and other work.
• Article 43 of the Labor Law. The employer trains or qualifies the proportion of its Saudi workers set by a decision of the Minister. The proportion is left to that decision by the wording of Article 43 of the Labor Law. In the sources we reviewed, we found no ministerial decision that sets it, so no figure is given.
• Article 44 of the Labor Law. The training programme covers the skill on which the worker is trained, the rules and conditions, its duration and number of hours, the theoretical and practical programmes, the method of testing and the certificates awarded.
• Article 15 of the Implementing Regulation. It requires an occupational description of each job’s tasks and requirements under the unified Saudi classification of occupations and the national occupational standards, an assessment of the trainee during or at the end of the training placed in the worker’s file, and no expenses related to the training charged to the trainee.
• Paragraph 6 of Article 15 of the Implementing Regulation. It limits any condition that the worker stays on after training to a period equal to the length of the training programme if the employment contract is for an indefinite term, or the remainder of the contract term if the contract is for a fixed term. Under a fixed term contract the ceiling is what remains of the contract, which may be shorter than the equal period.
• Article 15 bis of the Implementing Regulation. It requires training data to be disclosed and documented each year on the electronic platform the Ministry specifies.

The rule that the trainee is not charged any expenses is not absolute. The second paragraph of Article 16 of the Implementing Regulation allows the employer to charge the worker the training costs spent on the worker in three cases: the worker decides to end the training before its scheduled date without a legitimate excuse; the contract is rescinded during the training period in one of the cases in Article 80 of the Labor Law, other than its paragraph 6; or the worker resigns, or leaves work in a case other than those in Article 81 of the Labor Law, during the training period. Quoting paragraph 7 of Article 15 of the Implementing Regulation without these cases places it outside its setting.

Article 16 of the Implementing Regulation addresses further duties to every employer whose establishment is obliged to train. In the sources we reviewed, we found no definition of an establishment obliged to train, so we do not apply those duties to every employer.

The Schedule of Violations and Penalties (Ministerial Decision No. 112377) carries rows on the annual disclosure of training data and on training Saudi workers at the prescribed proportions, both of them Chapter One duties. In the sources we reviewed, we found no row that we could tie to the provisions on the qualification and training contract in Articles 45 to 49 of the Labor Law, and we infer no penalty for them.

How a training contract differs from reskilling, casual work and internal training

• Reskilling. It prepares an existing employee for a different role after the content of the employee’s own role has shrunk, changed or gone. A training contract is a type of contract made with a person who is not an employee. The shared word does not make the subject the same.
• A casual work contract. It is an employment contract whose subject is work outside the employer’s usual activity. The subject of a training contract is qualification, not work.
• An internal training programme. A training needs analysis examines whether training is what closes a gap in the first place, and a train the trainer programme prepares employees from inside the organisation to train their colleagues. Both are internal tools, and neither creates a contract of this kind by itself.

The provisions relied on are those of the Saudi Labor Law as published by the Ministry of Human Resources and Social Development: Article 5 (paragraph 4, the scope that admits the contract), Article 6 (the separate list for casual, seasonal and temporary workers), Articles 42 to 44 (the Chapter One duties), Articles 45 to 49 (the training contract) and Articles 80 and 81 (as referred to by the Implementing Regulation); and, from the Implementing Regulation issued by Ministerial Decision No. 115921 dated 19/8/1446H, Articles 15, 15 bis, 16, 16 bis (1), 16 bis (2) and 17. Royal Decree M/44 of 1446H amended Articles 46, 47 and 48 of the Labor Law within Chapter Two, and it left paragraph 2 of Article 48 of the Labor Law as it was. That decree did not amend Articles 45 or 49 of the Labor Law.

Before a training contract is signed

Three questions settle which rules govern the arrangement: whether the person is an employee or a trainee who is not one, whether the trainee is a student or graduate, and what the written contract says on service after the training, on compensation and on the reward. Answering them on paper before the training starts can avoid a later dispute over a rule that was never meant to apply.

This is an explanation of the concept and of the statutory provisions cited, not legal advice.

Related terms

• Tamheer
• Study Sponsorship Abroad
• Rotational Training
• Campus Recruitment
• Employment Status