Article 56 of the Saudi Labor Law
المادة 56 من نظام العمل · الباب الخامس: علاقات العمل
Article 56 provides that the term to which a fixed-term contract is renewed is treated as an extension of the original term when calculating the worker's rights linked to length of service.
Official text (Arabic)
This article has not been amended since the law was issued.
في جميع الحالات التي يتجدد فيها العقد لمدة محددة، تعد المدة التي تجدد إليها العقد امتدادًا للمدة الأصلية في تحديد حقوق العامل التي تدخل مدة الخدمة في حسابها.
This is the official Arabic wording, the only legally binding version. We do not translate the law itself; the explanation below is ours. Official source: Bureau of Experts at the Council of Ministers
Article 56 explained in plain English
Article 56 of the Labor Law deals with a common situation in the labor market: a worker is employed under a fixed-term contract, and then the contract is renewed for another fixed term. The question the article answers is: does the worker start counting their length of service afresh with each renewal, or is their length of service counted from the first day of work?
The answer is clear: the term to which the contract is renewed is treated as an extension of the original term, in all cases where the contract is renewed for a fixed term. That is, length of service is counted continuously from the beginning of the first contract to the end of the last renewal, and each renewal is not regarded as a new, separate contract.
This rule matters especially for rights in which length of service is taken into account, most notably the end-of-service award and other rights whose amount increases or whose conditions change with more years of work. A worker who worked two years and then had their contract renewed for two more years has their rights calculated on the basis of 4 years of continuous service, not on the basis of two years only.
This article is linked to Article 55, which regulates how a fixed-term contract is renewed, since it shows that a contract may be renewed by an express clause for a similar term or for a specified term, and that it becomes an open-ended contract if the renewal is repeated 3 successive times or the total of the original term and the renewal reaches 4 years, whichever is less, with the parties continuing to perform it. Whatever form the renewal takes, Article 56 ensures that the worker does not lose their previous length of service. Article 57 deals with a different case, namely an employment contract to complete a specific job, which ends on completion of that job.
In practice, every worker whose contract has been renewed once or more benefits from this article, since they are entitled to ask for their rights to be calculated on the basis of their full length of service from the start of the first contract. The employer must not split the length of service or recalculate it from zero at each renewal. If a dispute arises over the method of calculation in a particular case, it is advisable to consult a lawyer specialized in labor cases.
Practical example
Ahmed joined a company in Riyadh under a fixed-term contract for two years, and before the term ended the parties agreed to renew the contract for another two years on the same terms. When the renewal term ended, the employment relationship ended. The company initially considered that the length of service on which his rights are calculated was only the last two years, treating the renewal as a new contract. However, Article 56 provides that the renewal term is an extension of the original term, so Ahmed's length of service is counted as 4 continuous years from the start date of the first contract, and his rights in which length of service is taken into account, such as the end-of-service award, are assessed on this basis.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
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Active contributorFrequently asked questions about Article 56 of the Saudi Labor Law
Does length of service start counting afresh when a fixed-term contract is renewed?
No. Article 56 provides that the term to which the contract is renewed is treated as an extension of the original term, so length of service is counted continuously from the start of the first contract.
Is the end-of-service award calculated on the whole term of the original contract and its renewals?
Yes, because the end-of-service award is among the rights in which length of service is taken into account, and Article 56 treats the renewal term as an extension of the original term in determining these rights.
When does a renewed fixed-term contract become an open-ended contract?
Under Article 55, the contract becomes open-ended if the renewal is repeated 3 successive times, or the original term of the contract together with the renewal term reaches 4 years, whichever is less, with the parties continuing to perform it.
Does Article 56 apply if the contract is renewed more than once?
Yes. The article applies in all cases where the contract is renewed for a fixed term, so each renewal term is added to the original term when calculating the worker's rights linked to length of service.
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The texts are reproduced from the official website of the Bureau of Experts at the Council of Ministers for reference; where they differ, the officially published Arabic text prevails. This content is not legal advice.