Termination of Contract as Per Saudi Labor Law

Termination of an Employment Contract in KSA

Either an employee or employer can decide to terminate a contract of employment.

Employees may terminate their contract by resigning and an employer may terminate the contract by dismissing an employee.

Employment contracts may be terminated:

• Without notice by either party at any time during probation
• If the worker failed the medical examination
• By mutual consent of both parties
• On expiry of term of contract unless it is extended
• At the discretion of both parties in indefinite contracts
• Or on the worker attaining the age of retirement (60 years for male and 55 for female) unless both parties agree to work beyond the age of retirement.

The employer may dismiss the worker without notice for assaulting the employer/management:

• Failure to perform duties, follow legitimate orders or safety instructions; disobedience
• Misconduct or acts infringing on honesty or integrity
• Deliberately causing material loss to the employer
• Forgery in order to obtain the job
• Absence from work for more than 20 days in one year or for more than10 consecutive days
• Unlawfully takes advantage of his position for personal gain
• Disclosure of work- related industrial or commercial secrets, etc.

Termination of the contract by the worker without giving notice, if the employer/his representative

• Fails to fulfill contractual or statutory obligations
• Resorts of fraud at the time of contracting with respect to work conditions and circumstances
• Assigns the worker, without his consent, a work which is essentially different from the work agreed upon
• Committing a violent assault or an immoral act against the worker or any of his family members
• Subjects the worker to cruelty, injustice or insult
• Failed to take measures to remove serious health or safety hazard at the workplace of which he was aware
• Cause the worker to appear as the party terminating the contract through his actions, unjust treatment or violation of the terms of the contract, etc.

Termination of contract without a valid reason: If the contract is to be terminated without a valid reason, the party harmed by the termination is entitled to be compensated by the other party.

Related Article: LABOR LAW AMENDMENTS IN 2019