Provisions for terminating the employment contract and entitlement to end-of-service benefits

Termination provisions of the employment contract:

Article 55:

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  A fixed-term employment contract expires upon the expiration of its term. If both parties continue to execute it, the contract is considered renewed for an indefinite period, subject to the provisions of Article 37 (of this regulation regarding non-Saudis).
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  If the fixed-term contract includes a condition for renewal for an identical or specified period, it shall be renewed for the agreed-upon period. If the contract is renewed three consecutive times or if the original contract period along with the renewal period reaches four years, whichever is shorter, and both parties continue to execute it, the contract becomes an open-ended contract.

Article 56:
In all cases where the contract is renewed for a specified period, the renewed period is considered an extension of the original period in determining the worker's rights that are calculated based on the length of service.

Article 57:
If the contract is for a specific job, it terminates upon the completion of the agreed work.

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Article 74:
The employment contract terminates under any of the following conditions:

1. If both parties agree to terminate it, provided that the worker's consent is in writing.
2. If the specified period in the contract expires, unless the contract has been explicitly renewed according to the provisions of this regulation; in that case, it continues until its term.
3. Based on the will of either party in indefinite contracts, as stated in Article 75 of this regulation.
4. When the worker reaches the retirement age according to the applicable social security regulations, unless both parties agree to continue working after this age.
5. the dominant force.
6. Permanent closure of the establishment.
7. Termination of the activity in which the worker is employed, unless otherwise agreed.
8. Any other case specified by another system.

Article 75:

The resignation is submitted by the worker's desire to terminate his employment contract with the employer in writing, and the employer's approval of that request.

The provisions of resignation are included in the new Saudi Labor Law, in the text of Article 74 thereof, which clarifies that a fixed-term or indefinite-term employment contract can be terminated when he submits his resignation and the employer approves it in writing.

However, it stipulates that in the indefinite-term contract, the provisions of Article 75 of the new Labor Law apply, which obliges the party wishing to terminate to send a written notice to the other party before the termination for a period specified in the contract, provided that it is not less than 60 days if the worker's wage is paid monthly, and not less than 30 days in other cases.

As for the employee subject to the provisions of the Civil Service System, i.e. the government employee, he must submit his resignation to the government agency to which he belongs, and then:

Wait until the approval of his resignation is issued.

Or wait for a period of 30 days from the date of its submission.
If his resignation is approved, or if 30 days pass without a response to his request, his resignation request is considered accepted.

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Compensation:

Article 76:

If the party terminating the contract without specifying the notice period specified in Article (75) of this regulation fails to comply, they shall be obliged to pay the other party an amount equal to the worker's wage for the notice period unless the parties agree otherwise.

Article 77:

Unless the contract specifies a specific compensation for its termination by either party for an unjustifiable reason, the affected party shall be entitled to compensation as follows:

1. Fifteen days' wages for each year of the worker's service if the contract is unspecified in duration.
2. The remaining period of the contract's wage if the contract is of a specified duration.
3. The compensation referred to in paragraphs (1) and (2) of this article shall not be less than the worker's wage for a period of two months.

Article 78:

If the notice is given by the employer, the worker is entitled to be absent during the notice period for a full day per week or eight hours during the week, in order to search for other work, with the right to receive the wage for this day or the hours of absence. The worker shall specify the day of absence and its hours, provided that the employer is notified at least one day prior to the absence. The employer may exempt the worker from work during the notice period, with the worker's continuous service being calculated until the end of that period, and the employer shall be bound by the consequences thereof, especially the worker's entitlement to the wage for the notice period.

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In case of death:
Article 79:

The employment contract does not terminate upon the death of the employer unless his personal capacity was taken into consideration when concluding the contract. However, it terminates upon the death of the worker or his incapacity to perform his work, based on a certified medical certificate from authorized health authorities or the employer's appointed doctor.

:Occupational Disability

Article 79

Worker's inability to Work (Occupational Disability) Under Article 79 of the Labor Law

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Eligibility or non-entitlement to end-of-service compensation:
Article 80:

The employer may not terminate the contract without rewarding, notifying, or compensating the worker; Except in the following cases, provided that he is given the opportunity to state his reasons for opposing the annulment:

1. If the worker assaults the employer, the responsible manager, or one of his superiors or subordinates during or because of work.
2. If the worker does not perform his essential obligations arising from the employment contract, or does not obey legitimate orders, or intentionally does not observe the instructions - announced by the employer in a visible place - regarding the safety of work and workers, despite his written warning.
3. If it is proven that the worker has exhibited bad behavior, or committed an act dishonorable or dishonest.
4. If the worker intentionally commits any act or omission intended to cause material loss to the employer, provided that the employer informs the competent authorities of the incident within twenty-four hours from the time he learns of its occurrence.
5. If it is proven that the worker resorted to forgery to obtain work.
6. If the worker is appointed under probation.
7. If the worker is absent without a legitimate reason for more than thirty days during a single contract year or more than fifteen consecutive days, provided that the dismissal is preceded by a written warning from the employer to the worker after his absence for twenty days in the first case and his absence for ten days in the second case.
8. If it is proven that the worker illegally exploited his job position to obtain personal results and gains.
9. If it is proven that the worker disclosed industrial or commercial secrets related to the work in which he works.

Article 81:

The worker has the right to leave work without notice, while retaining all his statutory rights, in any of the following cases:

1. If the employer does not fulfill his essential contractual or statutory obligations towards the worker.
2. If it is proven that the employer or his representative committed fraud at the time of contracting with regard to the terms and conditions of work.
3. If the employer assigns him, without his consent, to work that is fundamentally different from the work agreed upon, and contrary to what is stipulated in Article Sixty of this law.
4. If the employer, a member of his family, or the responsible manager commits a violent assault or immoral behavior towards the worker or a member of his family.
5. If the treatment of the employer or the responsible manager is characterized by manifestations of cruelty, unfairness or insult.
6. If there is a serious danger in the workplace that threatens the safety or health of the worker, provided that the employer was aware of its existence and did not take any measures to remove it.
7. If the employer or his representative has pushed the worker by his actions, especially by treating him unfairly or by violating the terms of the contract, until the worker is ostensibly the one who terminated the contract.

Article 82:

The employer is not allowed to terminate the service of the worker due to illness before the worker exhausts the specified periods of leave provided for in this system. The worker has the right to request the deduction of their annual leave due to illness.

Article 84:

If the employment relationship ends, the employer is obligated to pay the worker a gratuity based on the duration of their service. The gratuity is calculated based on half a month's wage for each year during the first five years, and one month's wage for each subsequent year. The last wage received serves as the basis for calculating the gratuity. The worker is entitled to a gratuity for parts of the year based on the proportion of time spent working.

Article 85:

If the termination of the employment relationship is due to the worker's resignation, they are entitled to one-third of the gratuity after a minimum of two consecutive years of service, not exceeding five years. They are entitled to two-thirds of the gratuity if the duration of their service exceeds five consecutive years but does not reach ten years. The worker is entitled to the full gratuity if their service period reaches ten years or more.

Article 86:

Except for the provisions of Article 8 of this system, it is permissible to agree that all or some of the commissions, percentages of sales prices, and similar elements of the wage paid to the worker, which are naturally subject to increase or decrease, are not included in the wage used as the basis for calculating the end-of-service gratuity.

Article 87:

Except as provided in Article 85 of this system, the worker is entitled to the full gratuity if they leave work due to a compelling force beyond their control. The same applies to female workers who terminate their contract within six months of their marriage or within three months of childbirth.

Article 88:

If the worker's service ends, the employer must pay their wages and settle their rights within a maximum of one week from the date of termination of the contractual relationship. If the worker terminates the contract, the employer must settle their rights in full within a period not exceeding two weeks. The employer may deduct any debt owed to them by the worker from the amounts due to the worker due to work.