Private-sector establishments regularly face labor complaints. Some arise from genuine breaches, while others result from procedural issues, poor documentation, or disagreements over the interpretation of employment contract provisions. Under Ministerial Decision No. 91285, the Amicable settlement of labor disputes before a dispute may proceed to the labor court. How an employer manages this stage can determine whether the matter ends through settlement or develops into litigation that may continue for months and create financial and reputational costs. In this guide, the team at Al-Shatiri & Al-Ghamdi Law Firm explains what an employer needs to know from the moment a complaint is received until the file is formally closed.
Amicable settlement of labor disputes is the mandatory stage that precedes filing a claim before the labor court. The request is submitted electronically through the Qiwa platform or the Ministry of Human Resources and Social Development portal and is handled by the Amicable Settlement Department at the competent Labor Office within 21 working days from the date of the first session. If the parties reach an agreement, the settlement record becomes an enforceable instrument. If settlement fails, the dispute is referred to the competent labor court, whether in Jeddah or elsewhere depending on territorial jurisdiction.
Has your establishment received a labor complaint, and are you unsure how to manage the settlement session effectively? The team at Al-Shatiri & Al-Ghamdi Law Firm can attend on behalf of your establishment, prepare the legal file, conduct negotiations, and protect your legal position before the dispute proceeds to the labor court.
Would you prefer to understand the details first? Continue reading this guide to review the relevant legal requirements and procedures before contacting us.
What Is Amicable Settlement of Labor Disputes?
Amicable Settlement of Labor Disputes is a mandatory stage that precedes filing a labor claim before the courts. Its purpose is to allow the parties to the dispute, namely the employee and the employer, to reach a mutually acceptable solution without proceeding to litigation. The process is conducted through a specialized department within the Labor Offices under the Ministry of Human Resources and Social Development, known as the Amicable Settlement Department for Labor Disputes.
The process is intended to reduce the burden on labor courts, accelerate dispute resolution, and provide a flexible environment in which the parties can negotiate outside formal judicial proceedings. This stage has become a prerequisite for the admissibility of a labor claim before the labor court.
Legal Basis for Amicable Settlement
Amicable settlement is based on several interconnected legal sources:
- The Saudi Labor Law issued by Royal Decree No. M/51.
- Ministerial Decision No. 91285 approving the rules and procedures governing amicable settlement of labor disputes.
- The Implementing Regulations of the Labor Law.
- The Law of Civil Procedure where no specific provision applies.
Under these provisions, a labor claim is not admitted before the labor court unless the amicable settlement stage has first been completed.
Who May Submit an Amicable Settlement Request?
The request may be submitted by either party to the employment relationship:
- Employee: through the individual portal on Qiwa or the Ministry of Human Resources website.
- Employer or establishment: through the establishment portal to claim an outstanding right, request termination, or address another labor dispute.
- Heirs: may claim the deceased employee’s rights through a valid legal power of attorney or inheritance certificate.
- Legal representative: an authorized lawyer acting under a valid power of attorney permitting representation in proceedings.
Duration of the Amicable Settlement Process
Under the applicable rules, the amicable settlement period is 21 working days from the date of the first session. More than one session may be held during this period depending on the complexity of the dispute. If the period expires without an agreement, the case, together with the settlement records, is referred to the competent labor court.
| Stage | Approximate Period |
|---|---|
| Electronic submission of the complaint | Immediate through Qiwa or the Ministry website |
| Scheduling the first session | Usually within 7 to 14 working days |
| Total settlement period | 21 working days from the first session |
| Referral to the labor court if settlement fails | After expiry of the 21-day period |
Steps for Filing and Handling a Labor Complaint
- Log in to the electronic services portal, whether Qiwa or the Ministry website, using National Unified Access.
- Select the “Amicable Settlement of Labor Disputes” service.
- Complete the complaint details: parties to the dispute, subject matter, and amounts claimed, if any.
- Attach supporting documents, such as the employment contract, payroll statements, and correspondence.
- Submit the request and receive the complaint number.
- Receive notification of the first session date by text message and email.
- Attend the session before the competent Labor Office, whether in person or remotely where applicable.
- Discuss the dispute under the supervision of the settlement specialist.
- Prepare the session record and obtain the signatures of the parties.
- Close the file by agreement or refer it to the court if settlement cannot be reached.
What Should the Employer Bring to the Settlement Session?
Proper preparation by the employer can significantly affect how the session develops. The employer’s representative should bring:
- The establishment’s authorized representative, such as a manager, HR officer, or partner.
- A legal representative, such as a lawyer acting under a valid power of attorney, where possible.
- The employee’s complete file, including the employment contract, attendance records, payroll statements, warnings, and recorded violations.
- The establishment’s policies and approved Internal Work Regulations.
- All correspondence exchanged between the parties, including email, official WhatsApp communications, and notices.
- The employment record on Qiwa to establish contract documentation and duration.
- A calculated financial position showing the employee’s potential entitlements and the employer’s settlement limit.
- A prepared settlement proposal that has been internally approved.
Documents Required from the Employer
| Document | Purpose |
|---|---|
| Valid Commercial Registration | Establishes the legal status of the establishment |
| Employment Contract Documented on Qiwa | Establishes the contractual basis of the employment relationship |
| Recent Payroll Statements for 6 to 12 Months | Determines the employee’s actual wage |
| Attendance Records | Evidence of absence or overtime hours |
| Documented Warnings and Violations | May support dismissal under Article 80 |
| Termination Certificate or Resignation Letter | Determines the reason the employment relationship ended |
| Proof of Payment of Entitlements, If Any | Evidence that payment was made |
| Lawyer’s Power of Attorney | Authorizes representation of the establishment during the session |
The Settlement Agreement and Its Legal Effect
If the parties reach an agreement during the settlement stage, a Settlement Agreement Record is prepared, signed by both parties, and approved by the Amicable Settlement Department. The agreement has significant legal consequences:
- It constitutes an enforceable instrument that may be enforced directly before the Enforcement Courts if a party fails to comply.
- It finally resolves the dispute in relation to the matters covered by the agreement.
- The administrative file is closed on the relevant platform.
- The settlement is reflected in the establishment’s compliance indicators when the complaint is closed by agreement.
What Happens If Settlement Fails? The Jeddah Labor Court
If the 21-day period expires without agreement, or either party rejects the proposed resolution, the case and all settlement records are referred to the competent labor court. In Jeddah, the Jeddah Labor Court hears labor disputes where the place of work falls within Jeddah Governorate.
Jurisdiction of the Labor Court
- Disputes relating to employment contracts, wages, and rights arising from them.
- Disputes concerning workplace injuries and compensation.
- Challenges to disciplinary penalties.
- Claims relating to end-of-service benefits.
- Collective disputes between employers and employees.
Proceedings After Referral
- The claim is registered electronically through the Najiz portal.
- The first hearing is scheduled, usually within 2 to 4 weeks.
- The parties exchange written submissions.
- Evidence and witnesses may be presented where necessary.
- The court issues its first-instance judgment.
- The appeal stage follows if a party challenges the judgment.
Difference Between a Settlement Agreement and a Final Release
Employers often confuse these two documents, even though each has a different legal nature:
| Aspect | Settlement Agreement | Final Release |
|---|---|---|
| Nature | Official document issued through the Amicable Settlement Department | Bilateral document between the employer and employee |
| Approval | Approved by the Labor Office | Not formally approved unless separately documented |
| Enforceability | Directly enforceable instrument | May require court proceedings if disputed |
| Timing | After a dispute has arisen | Usually when the employment relationship ends amicably |
| Possibility of Challenge | Finally resolves the agreed matters | May be challenged on grounds such as coercion or unfairness |
For this reason, a formal settlement agreement carries stronger enforcement consequences than an ordinary release when resolving an existing dispute.
Common Mistakes Made by Employers
- Ignoring the complaint or failing to attend the first session, which may weaken the employer’s position later before the court.
- Sending an unauthorized representative who has no authority to negotiate or sign.
- Attending without the employee’s complete file, resulting in the need for another session and unnecessary delay.
- Negotiating emotionally instead of relying on legal arguments, figures, and supporting documents.
- Accepting an excessive settlement merely out of concern about proceeding to court.
- Rejecting every settlement proposal without properly evaluating the legal risks.
- Drafting a vague settlement record that leaves room for future claims.
- Failing to consult a specialized lawyer before the session.
The Role of a Labor Lawyer During the Settlement Session
Engaging a specialized labor lawyer can turn the settlement process from an improvised confrontation into a structured legal process. The lawyer’s role may include:
- Analyzing the case file before the session and identifying strengths and weaknesses.
- Calculating the employee’s actual entitlements and comparing them with the amounts claimed.
- Preparing a negotiation strategy, including minimum and maximum positions and possible concessions.
- Representing the establishment before the Amicable Settlement Department under a valid power of attorney.
- Drafting a clear settlement agreement intended to close the dispute conclusively.
- Preparing for labor court proceedings if settlement fails.
- Following up on enforcement after an agreement is reached.
Our team provides full representation before the Amicable Settlement Department and labor courts in Jeddah through our litigation and enforcement service and labor legal consultation service. To review our other services, visit our services, visit our contact page.
Frequently Asked Questions
What Is Amicable Settlement of Labor Disputes?
It is the mandatory stage that precedes filing a labor claim before the court. It is administered by the Amicable Settlement Department at the Labor Offices to help the parties resolve the dispute before litigation.
How Long Does the Amicable Settlement Process Take?
The total period is 21 working days from the date of the first session. More than one session may be held during that period depending on the complexity of the dispute.
Is Amicable Settlement Mandatory?
Yes. A labor claim is not admitted before the court until the amicable settlement stage has first been completed and the relevant records have been formally referred.
What Is the Legal Effect of a Settlement Agreement?
It constitutes an enforceable instrument that may be enforced directly before the Enforcement Courts if a party fails to comply with it. It also finally resolves the dispute concerning the matters expressly agreed upon.
Can an Employer File a Complaint Against an Employee?
Yes. An establishment may submit an amicable settlement request through the establishment portal to claim a right or resolve an employment dispute.
What Happens If the Employee Does Not Attend the Settlement Session?
The complaint may be administratively closed for non-attendance after the employee has been notified, and the employer may rely on the relevant record in subsequent proceedings.
Can an Employer Appeal If It Loses Before the Labor Court?
Yes. Either party may appeal a labor court judgment before the competent appellate court within the statutory period.
How Much Does Amicable Settlement Cost?
The amicable settlement service itself is provided free of charge through the Ministry. Costs may arise from legal representation, if a lawyer is retained, and from any amount agreed upon as part of the settlement.
Amicable settlement of labor disputes is not merely a procedural step before litigation. It gives an employer an opportunity to resolve a dispute at an early stage, avoid lengthy court proceedings, and document the outcome through an enforceable settlement agreement. Proper preparation from the first notification, supported by complete records and a clear assessment of the legal and financial position, can significantly improve the way the dispute is managed. Where the matter is complex, specialized legal representation can also help the establishment prepare for both settlement negotiations and possible court proceedings.
Sources:
- Saudi Labor Law – Bureau of Experts at the Council of Ministers
- Ministerial Decision No. 91285 Approving the Amicable Settlement Rules – Ministry of Human Resources and Social Development
- Amicable Settlement of Labor Disputes Service – Ministry of Human Resources and Social Development
- Implementing Regulations of the Labor Law – Ministry of Human Resources and Social Development
- Qiwa Platform
- Najiz Judicial Services Portal – Ministry of Justice
