Contract Non Renewal Letter To Employee Template for Saudi Arabia

When your fixed-term employment contract approaches its expiration date in Saudi Arabia, your employer may choose not to renew it. In such cases, they must provide you with a Contract Non Renewal Letter To Employee that complies with Saudi Labor Law requirements. This formal document serves as official notification of the employer's decision and ensures both parties understand their rights and obligations during the contract conclusion process.

When do you need this document?

You'll encounter this document when your employer decides not to extend your fixed-term contract beyond its current expiration date. This typically occurs in situations where companies are restructuring, when specific project-based roles are concluding, during organizational downsizing, or when employers choose not to continue employment relationships after evaluating performance or business needs. The document is also necessary when companies are implementing cost-cutting measures or when the original purpose for which you were hired has been fulfilled. Regardless of the reason, Saudi law mandates that employers provide formal written notice of non-renewal decisions.

Key legal considerations

Several critical legal elements must be addressed in any contract non-renewal letter under Saudi jurisdiction. The notice period requirements under Article 75 of Saudi Labor Law must be strictly observed, with employers providing adequate advance warning before contract expiration. End-of-service benefits calculations become crucial, as Article 84-88 specify how gratuity payments should be computed based on your length of service and final salary. The letter must clearly state your last working day, detail any outstanding company property that requires return, and outline the final settlement process including salary, allowances, and unused annual leave payments. Additionally, the document should reference your right to receive a service certificate upon request, as mandated by Article 89.

Legal requirements in Saudi Arabia

Saudi Labor Law (Royal Decree No. M/51) establishes specific requirements for contract non-renewal procedures that employers must follow. Articles 64-66 govern fixed-term contracts and their natural expiration or non-renewal processes, requiring clear documentation and proper notification procedures. Ministerial Resolution No. 70273 provides implementing regulations for employment contract termination documentation that must be observed. The letter must be issued on company letterhead, include proper reference numbers, and contain your complete contact details for official record-keeping. Employers must ensure the document clearly states the non-renewal decision, references the original contract terms including start and end dates, and confirms compliance with mandatory notice periods. Failure to provide proper notice or documentation can result in additional compensation obligations for employers under Saudi employment law.