Ajeer: Legalising secondments and facilitating supply of temporary work in KSA

The Ajeer system has been in place in the Kingdom of Saudi Arabia (the KSA) since 2014, providing a regulatory regime for temporary employment of foreign nationals (expatriates) working for non-sponsors in the Kingdom. The electronic system provides a mechanism for regulating the supply of workers from one entity to another.

‘Ajeer’ (meaning ‘rent’ or ‘loan’ in Arabic) is a term used in two contexts: a) to refer to an online platform regulating the ability of a foreign national employed by one entity to be seconded to work for another entity; or b) to refer to the supply of workers by a manpower supplier to its clients or end users.

The Ajeer system offers a number of features, including: 

• the ability to find labourers within the Kingdom; 
• the opportunity to loan excess labour services within an enterprise to other business owners; 
• the possibility to take advantage of excess labour services temporarily; and 
• the ability to issue notices online through an automated workflow that facilitates the loaning process and proves legality within the receiving enterprise. 
   

The ability to use Ajeer for secondments is conditional on both entities being classed as ‘medium green’ or above for Saudisation Nitiqat purposes (with the exception of the contracting permit).  Ajeer to regulate secondments has various permits the beneficiary party can apply for, however the main permits that are frequently applied for are highlighted below:

1. Ajeer contracting permit: this permit is granted to establishments that provide their labour services to other establishments and allows contracting establishments to prove the legal presence of their employees in the other establishment. it is limited to the sending company (and employer) having specific activities on its licence.
   An Ajeer contracting permit is available to an entity which has any of the following commercial activities on its commercial licence and its incorporation documents: construction, building, maintenance and operation contractors, consulting and business services, and education services (this being limited to institutions and colleges).
2. Ajeer secondment permit: this permit is used in instances where establishments wish to lend the services of their surplus employees to other establishments on a temporary basis.
3. Ajeer secondment permit: this permit is used in instances where employees are being seconded on a temporary basis to a sole proprietorship entity (1-5 employees).
4. ESNAD permit: used for the secondment of KSA nationals between human resources companies and other establishments.
    

Other permits include seasonal hire during Hajj season, temporary work during a period of a labour dispute, temporary employment of visiting professionals within the health sector, temporary use of chaperons within the education sector, and a number of other types. 

Ajeer for manpower supply is where companies provide workers directly employed by them to their clients or end users.  In such instance they are obliged to report to the Ministry of Human Resources and Social Development (MHRSD) on the number of workers provided to each of their clients whereupon the MHRSD will recalibrate the client’s headcount to take into account the workers provided to it and recalculate the client’s Nitaqat or Saudisation rating.  Employers must maintain a green rating in order to be able to receive workers from a manpower supplier.  This mechanism is therefore, designed to prevent a client or employer seeking to use a manpower agent in order to keep its headcount low and to circumvent its own direct duty to employ Saudi nationals. 
 

The Ajeer system has had a significant impact on the market over the last few years, and will continue to help facilitate the supply of temporary workers when no other permanent alternative is available.