Employment Contract Termination Notice Template for Saudi Arabia

When terminating an employment relationship in Saudi Arabia, you need a formal Employment Contract Termination Notice that complies with strict legal requirements. This document serves as official notification to your employee about the end of their employment and ensures you follow proper procedures under Saudi labor law.

When do you need this document?

You need an Employment Contract Termination Notice whenever you plan to end an employment relationship for any reason other than summary dismissal for gross misconduct. This includes situations such as redundancy, poor performance after warnings, company restructuring, or mutual agreement to terminate. The notice is required whether you're terminating a probationary employee, a fixed-term contract holder, or a permanent employee. You must also use this document when implementing workforce reductions due to business needs or when an employee's position becomes redundant due to technological changes or operational requirements.

Key legal considerations

Your termination notice must specify the exact notice period required by law - 30 days for monthly-paid employees and 15 days for others, as mandated by Article 75 of Saudi Labor Law. You must clearly state the termination reason and ensure it falls within legitimate grounds outlined in Article 80. The document should detail end-of-service benefit calculations according to Article 88, including gratuity payments based on the employee's length of service. Include specific information about final salary payments, unused leave compensation, and any outstanding benefits. You must also outline handover procedures, return of company property, and confidentiality obligations that survive termination. Ensure the notice complies with the Wage Protection System requirements for documenting final settlements.

Legal requirements in Saudi Arabia

Under Saudi Labor Law (Royal Decree No. M/51), you must provide written notice delivered through verifiable means such as hand delivery with acknowledgment or registered mail. The notice must be in Arabic or include an Arabic translation if originally drafted in another language. You're required to calculate and pay end-of-service benefits based on half a month's salary for each of the first five years of service and one month's salary for each subsequent year. For Nitaqat compliance, ensure termination doesn't negatively impact your Saudization ratios, particularly when terminating Saudi nationals. The document must include your company's commercial registration details and be signed by an authorized representative. Maintain proper records of the termination process, including delivery receipts and employee acknowledgments, as these may be required by the Ministry of Human Resources and Social Development during inspections or dispute resolution proceedings.