End Of Contract Letter To Employee Template for Saudi Arabia

When your employee's contract reaches its natural conclusion in Saudi Arabia, you must provide formal written notification through an End Of Contract Letter To Employee. This document serves as official confirmation of the employment relationship's termination and ensures compliance with Saudi Labor Law requirements.

When do you need this document?

You need this letter when any employment contract is ending by natural expiration, whether it's a fixed-term contract reaching its predetermined end date or an unlimited-term contract being terminated by mutual agreement. The letter is required for both Saudi nationals and expatriate employees, and must be issued regardless of the employee's position level within your organization. You'll also need this document when an employee has completed their probationary period successfully but the contract is ending, or when business restructuring requires contract conclusions. Saudi Labor Law mandates written notification for all contract terminations, making this letter a legal requirement rather than a courtesy.

Key legal considerations

Your End Of Contract Letter must include specific calculations for end-of-service benefits (gratuity) as required by Article 84 of Saudi Labor Law. The letter should clearly state the notice period being provided, which must comply with Article 75 requirements - typically 30 days for unlimited contracts or as specified in the original employment agreement. You must include details about final settlement payments, including any outstanding wages, unused vacation days, and statutory gratuity payments. The letter should also address the return of company property, completion of clearance procedures, and any post-employment obligations such as confidentiality or non-compete clauses. Ensure you reference the original employment contract and specify the exact termination date to avoid any legal disputes.

Legal requirements in Saudi Arabia

Under Saudi Labor Law, you must comply with specific termination procedures that include proper notice periods, accurate calculation of end-of-service benefits, and adherence to Wage Protection System (WPS) regulations for final payments. Article 88 requires you to provide a service certificate upon request, detailing the employee's job title, salary, and employment duration. Your letter must be issued on official company letterhead and include a clear reference number for record-keeping purposes. The Ministry of Human Resources and Social Development mandates that all final settlements be processed through approved banking channels, and you must ensure compliance with visa cancellation procedures for expatriate employees. Additionally, you must maintain proper documentation of the termination process and ensure all clearances are completed before the employee's final departure, as required by Saudi regulations.