The Sri Lankan cabinet has cleared a landmark migrant worker agreement with Saudi Arabia that could result in better working conditions for thousands of Sri Lankans in that country, an official said yesterday.

The proposed agreement on domestic worker recruitment between Sri Lanka and Saudi Arabia aims to improve and safeguard the rights of migrant domestic workers, Xinhua reported.

Currently about 500,000 Sri Lankans are employed in Saudi Arabia and 60% of them are women.

The agreement, which is only the second entered into by Saudi Arabia - the first was signed with the Philippines - is targeted at ensuring protection for the workers.

Some of the salient features of the agreement include the employer opening a bank account for the worker and depositing the salary directly into the account. The documents of the account must remain with the worker.

Migrant workers will also be entitled to 30 days paid vacation in Sri Lanka at the end of two years of service and if the employee is returning to the same employer an additional one month salary must be paid.

“Under this agreement the passport of the worker will remain with the worker. We felt this was very important as there are many complaints that people are being held hostage because they do not have a passport to return home,” cabinet spokesman and Media Minister Keheliya Rambukwella said.

Recruitment will be done at no cost to the domestic worker under the new agreement. However, it is unclear when the Sri Lankan government will enter into the new agreement but Rambukwella assured it would be “soon”.

India is also about to close a similar agreement with Saudi Arabia along the same lines.

The agreement comes a year after a Sri Lankan female domestic worker was beheaded in Saudi Arabia for a crime she was convicted of when she was a minor.

The case drew much condemnation on the conditions of domestic workers abroad.

Meanwhile, according to a Chinese state news agency, China and Sri Lanka could sign a free trade agreement by the end of the year.

In an interview with Xinhua on Wednesday, Sri Lanka’s Foreign Minister G L Peiris, who is on a four-day visit to China, said “the feasibility study is on the verge of completion”.

Peiris said it would be the most significant bilateral achievement since the 1952 Rubber-Rice Pact, when rubber and rice was bartered between China and Sri Lanka.

China has increasingly tight ties with Sri Lanka, funding airports, roads, railways and ports. Those ties have unsettled India, traditionally Sri Lanka’s closest economic partner.

The island of 20mn people just off India’s southern tip is at the forefront of competition between Asian giants China and India.

China has consistently defended Sri Lanka’s rights record, which came under fire at a Commonwealth summit in November, saying Colombo had made big strides in promoting human rights and achieving national reconciliation over the years.