Saudi Arabia on Wednesday announced plans to abolish the seven-decade-old labor sponsorship system known as “kafala” in the Kingdom, a step forward for the country’s modernization drive and economic reform plans, according to reports.
Launched by the Ministry of Human Resources and Social Development, the planned reforms are to take effect in March 2021. The initiative also aims to make the Saudi job market more attractive.
The currently applicable “kafala” system generally binds a migrant worker to one employer. While the term “kafala” is not officially used in Saudi Arabia anymore as of roughly 20 years ago, Sattam Alharbi, deputy minister for development of the work environment, told Reuters in a phone interview “there were many wrong practices of it that helped breach the contractual relation,” Alharbi said.
Under the new rules, foreign workers “will still be required to pay for an exit and re-entry visa,” Bloomberg reports.
“Runaway” reports that employers can file against foreign workers who stop showing up to their jobs — effectively rendering them fugitives — will be abolished and replaced with a procedure for ending their contract, according to Bloomberg.
The decision is both an economic reform and a social one. Once enacted, the new rules will empower foreign workers to determine their own fate and leave jobs or the country on their own free will. It will also make the Saudi labor market more competitive, as foreign workers would be able to be hired by other employers if they have a better opportunity.
The changes could have a dramatic impact on Saudi Arabia’s labor market and the lives of the 10.5 million foreign workers who make up about a third of the kingdom’s population.
The decision, dubbed the Saudi Labor Reform Initiative (LRI), was welcomed by heads of diplomatic missions in Riyadh, Arab News said.
“These changes are not small changes — it’s huge,” Alharbi said, explaining the government had worked on the overhaul for two years, according to a Bloomberg interview. “We aim to achieve more inclusion for Saudis, attract talent, improve the working conditions, make Saudi Arabia’s labor market more dynamic and productive.”
