How to Terminate Contract in Saudi Arabia

If a company ceases or completely ceases to work in a particular activity, the amendments to the Labour Code that entered into force in 2015 also provide by law that the contracts of the employees concerned who work in these establishments may be terminated (Article 74). 1- Salary of fifteen days for each year of service of the employee, if the contract is indeterminate. An employer may dismiss an employee bound by a fixed-term employment contract in one of three ways: non-renewal of the employment contract at the end of the duration of the contract; an event that triggers one of the clauses of the contract in relation to dismissal or dismissal, unless these conditions are contrary to the Saudi Labour Code or public order; or a conversion of the fixed-term employment contract into an employment contract of indefinite duration that allows termination with 60 days` notice and just cause – however, the Labour Code provides that the expiry date of the work permit is considered a fixed term for foreign workers if no fixed term is fixed. In practice, only Saudi nationals are allowed to have contracts of indefinite duration. Employees can terminate their contract by dismissal and an employer can terminate the contract by firing an employee. Termination of the contract by the employee without respecting any deadline if the employer / his representative 2- salary of the remaining contractual period mentioned, if the contract is limited in time. Termination must be in writing and state the reasons for the termination. If the termination takes place without just cause, the employee must receive at least two months` salary as severance pay. In addition, if the contract is limited in time, the balance of the wages due for the duration must be paid (but always at least two months). · On the basis of the will of one of the parties to contracts of indefinite duration in accordance with article 75 of the Labour Code. • If the party who terminated the contract for an indefinite period does not comply with the deadline set for dismissal in accordance with Article (75) of the Labour Code, it shall pay the other party within the notice period an amount equal to the employee`s salary for the same period, unless the parties no longer agree. · If the contract concerns the performance of a particular work, it ends with the completion of the agreed work.

· If both parties agree to terminate it, provided that the employee`s consent is in writing. Termination of the contract without valid reason: If the contract is to be terminated without a valid reason, the party harmed by the termination is entitled to compensation from the other party. The dismissal of employees bound by employment contracts of indefinite duration requires, in addition to a valid reason, that the employee receives a written notice describing the reason for the dismissal. Employees who are paid monthly must receive the notice at least 60 days before the dismissal, while all other employees must receive such dismissal at least 30 days in advance. However, the employer may waive the employee`s respective statutory notice period if a payment is made to the employee in the amount of the salary for the duration of the notice period. In cases where an employer wishes to terminate an employee`s contract for cause, but the employee disputes the basis for the termination, the parties may enter into a settlement agreement to avoid lengthy litigation before the Labour Dispute Resolution Board, which is responsible for resolving disputes between employers and employees. Typically, agreements are reached between the parties after an employee has already filed a complaint. • The employment contract does not expire with the death of the employer, unless his person was taken into account when concluding the contract. However, it expires with the death of the employee or his inability to perform his work, according to a medical certificate approved by the authorized health authorities or the authorized doctor designated by the employer. As a last resort, an employer may terminate an employment contract with just cause if the employee engages in extremely inappropriate behavior (for example.

B by attacking the employer; see below for a more detailed discussion of dismissal for cause). In these cases, the employer must give the employee the opportunity to oppose the dismissal and give reasons for his decision (Article 80 of the Labour Code). An employee or employer may decide to terminate an employment contract. For the dismissal of an employee in Saudi Arabia, a notice period of 60 days is required for contracts of indefinite duration and monthly). For fixed-term contracts, the notice period is 30 days. The mere expiry of a fixed-term contract is therefore not sufficient to comply with the rules on termination and termination. The employment contract expires in one of the following cases: According to the Labour Code, an employee, whether it is a contract of indefinite duration or a fixed-term contract, may not be dismissed without giving reasons, unless the dismissal took place during and in accordance with the trial period actually negotiated by the employee. Rather, termination must be supported by just cause set out in a written communication. There are no guidelines on the scope of a valid reason, and there is evidence that courts are more willing to find a valid reason for dismissal if the employee is an expatriate rather than a Saudi national.

• Unless the contract contains a specific indemnity in exchange for its termination by either party for illegal cause, the party affected by the termination of the contract will receive compensation as follows: · If the term specified in the contract expires – unless the contract is expressly extended in accordance with the provisions of labour law – it remains valid for its duration. · If the contract is of indefinite duration, either party may terminate it for a legitimate reason, indicated by a written notice to the other party before the end of the period specified in the contract, provided that it is at least sixty days if the employee`s salary is paid monthly. and no less than thirty days for the others. Regardless of how the employee`s contract is terminated, the employer is required to pay the employee`s salary and settle all of the employee`s claims within one week of the date of termination or termination. If the employee is a foreign employee, the employer must also bear the cost of a return trip to his country of origin, unless the latter resigns for lack of legitimate reason (Article 40(2) of the Labour Code). Dismissals are considered valid grounds for termination of employment contracts. If a company restructuring or other business decisions result in staff redundancies, a company may terminate the contracts of certain dismissed employees, provided that it complies with the statutory notice period or pays for them. . Dismissal and dismissal is an area that attracts a lot of attention because many countries are very supportive of workers in their policies.

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