• The following words and phrases - wherever they appear in these rules and arrangements - mean the meanings shown in front of each, unless the context requires otherwise:

• Rules and Arrangements: The rules and arrangements for how to treat employees and workers in the sectors targeted for transformation and privatization.

• Employee: Every person with a natural capacity occupying a public civil position in the state or performing its tasks, regardless of the nature of his work or the name of his position, and is subject to the Civil Service Law - or any other employment system - and the Civil Pension Law.

• Worker: Every person with a natural capacity working for the benefit of a government entity and under its management or supervision in return for a wage, even if he is far from its supervision, and is subject to the Labor Law and the Social Insurance Law.

• Basic Salary: Everything the employee receives in return for his work, according to his rank and job grade.

• Actual Salary: The basic salary plus all the allowances determined for the employee.

• Basic Wage: Everything the worker receives in return for his work, under a written or unwritten work contract, regardless of the type of wage or method of performance, plus periodic bonuses.

• Actual Wage: The basic wage plus all other due increases determined for the worker in return for the effort exerted in the work, or risks faced during the performance of his work, or determined for the worker in return for the work according to the work contract or the work regulation.

• Transformation: The transition of the subjection of government entity employees from the Civil Service Law or any other employment system to the Labor Law, or the transition of its workers from the employment regulation applied to them to another employment regulation; as a result of the issuance of the transformation decision.

• Transformation Decision: A decision from the Council of Ministers approving the transformation.

• Privatization: The transition of the subordination of employees and workers of a government entity from the public sector to the private sector; as a result of the issuance of the privatization decision.

• Privatization Decision: A decision from the Council of Ministers approving the transfer of ownership of assets, or a decision from the Board of Directors of the National Center for Privatization or the supervisory committee of the sector targeted for privatization approving the partnership between the public and private sectors; as the case may be.

• Competent Authority: The authority to which the employees and workers belong before the transformation.

• Supervisory Authority: The authority to which the employees and workers belong before the privatization.

• Secondment: The temporary work of an employee or worker of the supervisory authority at the authority to which they are transferred.

• Transferred Authority: The authority to which the employees and workers are transferred based on the issuance of the transformation decision or the issuance of the privatization decision, as the case may be.

• Supervisory Committee: The supervisory committee of the sector targeted for privatization, formed based on the rules of work of the supervisory committees for the sectors targeted for privatization and their tasks (amended), issued by Council of Ministers decision No. (55) dated 1442/1/20 AH.

The rules and arrangements apply to Saudi employees and workers in the entities for which a transformation decision is issued, and in the entities or government services for which a privatization decision is issued, as the case may be.

The competent authority, based on the issuance of the transformation decision, in coordination with the Ministry of Human Resources and Social Development, establishes fair and clear mechanisms and criteria that determine the basis for differentiation between employees and workers to identify those who will be selected for transformation.

• An employee who meets the criteria stipulated in Article (Three) of the rules and arrangements and wishes to transfer to the Labor Law shall be treated according to the following arrangements:

  • 1- If his service period counted for retirement is less than (twenty-five) years, his service in the position he occupies shall be terminated, and he shall be given the choice between the following options:

    • A- Settle his pension rights according to paragraph (2) of Article (Eighteen), and Article (Twenty-Three), of the Civil Pension Law.

    • B- Combine his previous service period subject to the Civil Pension Law with his new service period subject to the Social Insurance Law based on paragraph (3) of this article, according to the Law of Benefit Exchange between the Civil and Military Pension Laws and the Social Insurance Law.

  • 2- If his service period counted for retirement is (twenty-five) years or more, his service in the position he occupies shall be terminated, and he shall be given the choice between the following options:

    • A- Refer him to early retirement according to paragraph (1) of Article (Eighteen) of the Civil Pension Law.

    • B- Combine his previous service period subject to the Civil Pension Law with his new service period subject to the Social Insurance Law based on paragraph (3) of this article, according to the Law of Benefit Exchange between the Civil and Military Pension Laws and the Social Insurance Law.

  • 3- In all cases mentioned in paragraphs (1) and (2/B) of this article, the entity to which he is transferred shall conclude an employment contract with the person whose service has been terminated, according to the employment system applied in the entity and according to the wages and benefits in effect there, taking into account the following:

    • A- The basic salary he will receive shall not be less than the basic salary he was receiving before the transfer.

    • B- The actual salary he will receive shall not be less than the actual salary he was receiving before the transfer.

• The competent authority shall treat the employee who meets the criteria stipulated in Article (Three) of the rules and arrangements and wishes to transfer to the Labor Law, in relation to his financial and functional rights; upon his transfer, according to the following arrangements:

• 1- Payment of his financial entitlements - if any - in addition to a reward calculated on the basis of (16%) of his basic salary for each year of his service (and for each part of the year proportionately), provided that the total amount paid to him according to this paragraph does not exceed (four) basic salaries, or based on the reward due to him upon the termination of his service according to the employment system applicable to him, whichever is greater.

• 2- He shall be compensated for his leave balance according to the employment system he was subject to before the transition.

• An employee who meets the criteria stipulated in Article (Three) of the rules and arrangements and does not wish to transfer to the Labor Law shall be treated according to the following arrangements:

• 1- He shall be absorbed into the competent authority by a decision issued by it - in coordination with the Ministry of Human Resources and Social Development - for those not included in the transformation, within a period not exceeding (one year) from the date of issuance of the transformation decision. If it is not possible to absorb him into the competent authority, he has the right to transfer his services with his position - in coordination with the Ministry of Human Resources and Social Development and the Ministry of Finance - to any other government entity, within a period not exceeding (six months) from the date of notification by the competent authority of its decision. The concerned minister or president may extend this period for a similar period - in the narrowest limits - and the employee may be absent from work during this period for one full day a week or (eight) hours during the week to search for a government entity to which he can transfer his services with his position. If he is unable to transfer his services during this period, his service in the position he occupies shall be terminated.

• 2- The employee shall be treated upon termination of his service according to the following arrangements:

  • A- If his service period counted for retirement is less than (twenty-five) years, he has the choice between the following two options:

    • 1- Settle his retirement rights according to paragraph (2) of Article (Eighteen), and Article (Twenty-Three), of the Civil Pension Law.

    • 2- Combine his previous service period subject to the Civil Pension Law with his new service period subject to the Social Insurance Law, according to the Law of Benefit Exchange between the Civil and Military Pension Laws and the Social Insurance Law, in case he joins a job subject to the Labor Law and the Social Insurance Law.

  • B- If his service period counted for retirement is (twenty-five) years or more, he has the choice between the following two options:

    • 1- Refer him to early retirement according to paragraph (1) of Article (Eighteen) of the Civil Pension Law.

    • 2- Combine his previous service period subject to the Civil Pension Law with his new service period subject to the Social Insurance Law, according to the Law of Benefit Exchange between the Civil and Military Pension Laws and the Social Insurance Law, in case he joins a job subject to the Labor Law and the Social Insurance Law.

• The competent authority shall treat the employee who meets the criteria stipulated in Article (Three) of the rules and arrangements and does not wish to transfer to the Labor Law, in relation to his financial and employment rights, according to the following two arrangements:

  • 1- Payment of his financial entitlements - if any - in addition to a reward calculated on the basis of (16%) of his basic salary for each year of his service (and for each part of the year proportionately), provided that the total amount paid to him according to this paragraph does not exceed (four) basic salaries, or on the basis of the reward due to him upon the termination of his service according to the employment system applicable to him, whichever is greater.

  • 2- He shall be compensated for his leave balance according to the employment system to which he is subject.

• An employee who does not meet the criteria stipulated in Article (Three) of the rules and arrangements shall be treated according to the following arrangements:

  • 1- He shall be absorbed into the competent authority by a decision issued by it - in coordination with the Ministry of Human Resources and Social Development - for those not included in the transformation, within a period not exceeding (one year) from the date of issuance of the transformation decision.

  • 2- If it is not possible to absorb him according to paragraph (1) of this article, coordination shall be made with the Ministry of Human Resources and Social Development and the Ministry of Finance to transfer his services with his position to another government entity.

  • 3- He shall be treated upon the termination of his service according to the arrangements stipulated in paragraph (2) of Article (Six) of the rules and arrangements.