End of Employment Policy

Q. What are the rules for end of contract in Saudi Arabia?

As per the Saudi labor laws, a work contract shall terminate in the following cases: 

• If both the employer and the worker agree to end the contract, the worker needs to confirm this in writing.
• If the time period mentioned in the contract comes to an end and  it could not be renewed, the contract will continue until its term finishes.
• Either party can decide to end a contract that doesn't have a specific time frame.
• If the worker reaches the retirement age of sixty for males and fifty-five for females, the contract will end unless both parties agree to continue working after this age. 

Q. What is the minimum notice period in Saudi Arabia?

The employees are required to serve a notice period of 30 days as stipulated in the laws. 

Q. What if someone is not able to serve the notice period in KSA? 

If the worker ends the contract without serving the notice period, they must pay the other party. The law has stated that the compensation should be the worker's wage for the notice period or the remaining balance.

Also Read: Letter of Termination

Q. What if the worker is terminated due to an invalid reason?

If the employee ends the contract without any valid reason, the worker gets paid for the damage he has gone through. The Commission for the Settlement of Labor Disputes will figure out the compensation amount. They consider the reasons for ending the contract, as well as the actual and potential damages, both material and emotional.

Q. Are there any specific conditions under which an employer can terminate an employee?

As dictated by the law, the employer is not allowed to end the contract without any valid reason but there are certain conditions where they can take this action: 

• If the worker assaults the company, manager or any of his superiors while he’s working for the company.
• If the worker doesn't do the essential tasks from the work agreement or disobeys reasonable orders, especially about safety, even after written warnings.
• If there's proof that the worker has done something wrong or acted dishonestly.
• If the worker purposely does something to cause the employer a significant loss, and the employer reports it to the authorities within 24 hours of finding out.
• If the worker uses forgery to get the job.
• If the worker is on a trial period.
• If the worker is absent without a good reason for more than 20 days in a year or more than 10 days in a row. But, the employer must warn the worker in writing after 10 days of absence in the first case and after 5 days in the second.
• If the worker unfairly uses their position for personal gain.
• If the worker reveals secrets about the company's business or industry.

Also Read: What is Wrongful Termination?

Q. If the worker is going through an illness, can he leave the job without serving the notice period? 

No, the employer cannot fire a worker if they are going through an illness. As per the Saudi labor laws, in such cognitions, the worker can use their sick leaves and if it is needed they can also include their annual leaves. 

Q. What is the retirement age according to KSA labor laws?

In accordance with the regulations, the retirement age is 60 years for men and 55 years for women with at least 120 months of paid or credited contributions. Retirement at any age is possible with 300 months (25 years) of contributions.

Also Read: What is a Defined Contribution Plan?

Q. Does an employee get any financial benefits  such as severance pay or end of service  benefits in Saudi Arabia?

If the employee decides to resign, and they have worked continuously for at least two years but no more than five years, they are entitled to one-third of the award. If their service is more than five years but less than ten years, they get two-thirds of the award. If they've worked for ten years or more, they receive the full award.

Also read: What is Outplacement?