Saudi Arabia & Labour Relations
The world’s most oil-wealthy economy with the most restricted labour rights
Saudi Arabia has one of the most restrictive labour rights environments of any country in the world. Trade unions are prohibited, strikes are illegal, and collective bargaining does not exist. The country’s labour market is structured around the kafala sponsorship system, which ties migrant workers — who comprise approximately 75% of the private sector workforce — to specific employers in ways that create profound vulnerabilities. Understanding Saudi Arabian labour relations means understanding the intersection of oil wealth, religious conservatism, and systematic migrant worker exploitation.
10 Things That Stand Out About Labour Relations in Saudi Arabia
- Saudi Arabia prohibits trade unions entirely. Workers have no legal right to organize, bargain collectively, or strike. The Labour Law of 2005 provides some individual employment protections but contains no provisions for collective worker representation. Saudi Arabia is one of very few countries in the world where unions are simply absent from the legal framework.
- The kafala (sponsorship) system requires migrant workers — who make up approximately 38% of Saudi Arabia’s total population and 75% of the private sector workforce — to have a Saudi sponsor (kafeel) who controls their ability to work, change jobs, or leave the country. This system creates structural conditions for exploitation by giving employers extraordinary power over workers.
- One of the most significant figures in the context of Saudi Arabian labour is Anas Al-Yahya, a Saudi labour reformer who has worked within government structures to modernize the kafala system. His work on the Saudi Vision 2030 labour reforms reflects attempts to address the worst aspects of migrant worker vulnerability while maintaining the fundamental structure of kafala.
- Saudi Arabia’s labour market is structured around a national/expatriate divide. Saudi nationals work primarily in the public sector and large private enterprises, with wages and conditions set by government decree. Expatriate workers fill the vast majority of private sector roles, from domestic work and construction to finance and technology, under conditions that vary enormously by origin country and employer.
- Saudi Arabia’s domestic workers — primarily women from the Philippines, Indonesia, Ethiopia, and other countries — are particularly vulnerable. Excluded from the Labour Law’s protections until 2013 reforms, and still insufficiently covered, domestic workers have no formal means of seeking redress for abuse and have been among the most exploited workers in any country.
- The Nitaqat nationalization programme, introduced in 2011, requires Saudi companies to employ minimum percentages of Saudi nationals (quotas vary by sector). This programme has reduced migrant worker employment in some sectors but has also created market distortions as companies hire Saudi nationals as nominal employees while continuing to rely on migrant labour for actual work.
- Saudi Arabia’s oil sector — operated by Saudi Aramco, one of the world’s most profitable companies — is the only sector with anything resembling structured industrial relations. Saudi Aramco employees enjoy wages and benefits far above the national norm, set by company policy rather than collective bargaining, reflecting the government’s interest in maintaining stability in its most economically critical enterprise.
- Reforms announced under Vision 2030 have partially modified the kafala system, allowing workers in some categories to change employers without sponsor permission and to leave the country without exit visas. However, fundamental restrictions remain, and enforcement of even limited protections is inconsistent.
- Saudi Arabia’s construction sector — which has built the extraordinary infrastructure of modern Saudi cities, stadiums, and mega-projects — is entirely dependent on migrant labour from South and Southeast Asia. The conditions in construction worker camps, the withholding of wages, and the heat-related deaths of workers have attracted international condemnation, particularly as Saudi Arabia hosts international events.
- The international scrutiny on Saudi labour conditions — through the ILO, human rights organizations, and media coverage — has produced some incremental improvements but has not changed the fundamental structure of a system built on the absence of worker rights. The 2034 FIFA World Cup bid and broader Vision 2030 international engagement create pressure for reform that may gradually produce more substantive change.
