As a legal consultant specializing in the non-profit sector and an expert in the Saudi Labor System, I present to you this comprehensive guide that highlights the controls and regulatory provisions governing labor relations within non-profit organizations. Understanding these rules is not just a legal obligation; it is the foundation for building a stable and productive work environment that serves the noble goals of the organization and safeguards the rights of all its parties.

First: The Legal Basis for Employment Relationships in Non-Profit Organizations

Some may believe that the non-profit nature of non-profit organizations exempts them from applying certain regulations, but this is a mistaken belief. The origin is that non-profit organizations, as established and organized entities, are subject to the provisions of the Saudi Labor System when entering into employment contracts to manage their affairs. Article 5 of the Labor Law stipulates that the provisions of the system apply to "workers in charitable institutions," and non-profit organizations fall under this description.

Therefore, every non-profit organization, as an employer, must adhere to all provisions contained in the Labor System and its executive regulations and complementary ministerial decisions when organizing its relationships with its employees.

Second: Concluding an Employment Contract: Form and Content

The contract is the cornerstone of any employment relationship; it is the document that defines the rights and obligations of both parties. The Saudi regulator has placed great importance on the form and content of this contract.

1. Contract Form:

The employment contract must be written and edited in Arabic in two copies, with each party retaining a copy. According to Article (13) of the Executive Regulation for Self-Employment Programs, whose provisions can be referenced, it is permissible to use another language alongside Arabic, provided that the Arabic text is always the relied-upon text in case of differences.

2. Standard Forms:

The Ministry of Human Resources and Social Development issued Annex No. (5) related to standardized employment contract forms, which provide an excellent framework for organizations to draft their contracts in accordance with the system. It is strongly recommended to use these forms as a starting point to ensure that all mandatory clauses are covered.

3. Basic Data in the Contract:

The contract must include at least the following essential data:

• Parties' Data: The name of the organization and its official details, the name of the employee, nationality, personal details, and address.

• Nature of Work: Job title and main tasks.

• Workplace.

• Salary: Specify the basic salary and all allowances and other agreed benefits.

• Contract Duration: The contract for a non-Saudi employee must be for a fixed term. As for a Saudi employee, it can be either fixed or unlimited, keeping in mind that if the fixed-term contract is executed beyond its expiration by both parties, it will convert to an indefinite-term contract.

• Probation Period: If agreed upon, it should not exceed 90 days, and it can be extended by written agreement to 180 days.

• Start Date of Work.

Third: Obligations of the Non-Profit Organization (Employer)

The organization has a set of essential obligations that cannot be neglected, as indicated in the standardized contract forms:

• Salaries: Paying the employee’s wages on time.

• Registration with Social Insurance: The organization is obligated to register all its employees with the General Organization for Social Insurance and pay the mandated subscription share.

• Medical Insurance: Providing medical care for the employee and their family members covered by the system through cooperative health insurance.

• Working Hours and Rest: Adhering to the maximum working hours and granting daily rest periods and weekly rest (one day paid leave as a minimum).

• Leave: Enabling the employee to take their statutory leave, topped by annual leave of no less than 21 days, increasing to 30 days after five consecutive years of service.

• Fees for Non-Saudi Employees: The organization bears the costs of recruitment, residence and work license fees, renewal of these, service transfer fees, and the return ticket for the employee to their country after the contract ends.

• End of Service Benefit: This is the right of the employee upon termination of the employment relationship, calculated based on half a month's salary for each of the first five years and a full month's salary for each subsequent year.

Fourth: The Role of Governance in Organizing Employee Affairs

The human resources management in non-profit organizations is inseparable from the governance rules imposed by the law regulating associations and institutions and the regulations issued by the National Center for Non-Profit Sector Development. It is vital to distinguish between the roles of different entities within the organization to ensure full compliance:

• Role of the Board of Directors (supervisory and approval role):

According to Article 31 of the Executive Regulation for Associations Law, the Board of Directors is responsible for the following:

- Approving the organizational and functional structures in the organization.

- Appointing an executive officer and a full-time financial manager, and appointing key staff.

- Approving policies and procedures that ensure the organization's compliance with regulations and laws, including human resources policies.

• Role of the Executive Body (executive and propositional role):

According to Article 38 of the Governance Rules for Associations and Institutions, the executive body is responsible for:

- Proposing organizational and functional structures and presenting them to the Board for approval.

- Implementing the policies, regulations, and internal systems approved by the Board of Directors.

- Executing internal control systems and managing the daily operations of the organization.

Therefore, having an internal work regulation approved by the Ministry of Human Resources and Social Development is essential for organizing the work environment and detailing rights and obligations in accordance with the strategic directions established by the Board and implemented by the executive body.

And always remember:

The commitment of the non-profit organization to the controls of the Labor System is not just a legal duty; it is an investment in its human capital, which is the main driver for achieving its mission. Producing clear and fair employment contracts and upholding employee rights ensures a healthy work environment, enhances the organization's reputation and credibility in front of all stakeholders, and contributes to attracting and retaining the best talents.