Notice Of Termination Of Contract Template for Saudi Arabia

When terminating an employment contract in Saudi Arabia, you must provide formal written notice that complies with strict legal requirements under Saudi Labor Law. This document serves as official proof of the termination decision and protects both parties by clearly establishing terms, timelines, and obligations throughout the process.

When do you need this document?

You need this notice whenever ending an employment relationship, whether you're dismissing an employee for performance issues, conducting redundancies due to business restructuring, or responding to an employee's resignation. It's also required when terminating contracts due to end of project completion, expiry of fixed-term agreements, or mutual agreement between parties. The document becomes essential during company closures, department eliminations, or when employees breach their contractual obligations. You must also use this notice for probationary period terminations and when ending employment due to health issues that prevent continued work performance.

Key legal considerations

Your notice must specify the exact termination reason, as Saudi Labor Law distinguishes between justified and unjustified terminations under Articles 74-83. You must calculate and include end-of-service benefits accurately, considering the employee's length of service, final salary, and applicable allowances. The notice period requirements vary based on the employee's salary payment frequency - monthly paid employees require 60 days' notice while others need 30 days. You must ensure the termination complies with Shari'ah principles and doesn't violate anti-discrimination provisions. Include details about final salary payments, unused vacation compensation, and any post-employment restrictions or non-compete clauses that remain in effect.

Legal requirements in Saudi Arabia

Under Saudi Labor Law (Royal Decree No. M/51), your termination notice must be issued on official company letterhead with proper authorization from designated signatories. You must follow the procedural requirements outlined in Ministerial Resolution No. 70273, including specific formatting and content standards. The notice must trigger immediate action regarding the employee's work permit and residence visa status, as these become invalid upon contract termination. You're required to provide the Ministry of Human Resources and Social Development with termination notifications within specified timeframes. The document must reference the original employment contract and specify the handover process for company property, access credentials, and confidential information. Ensure all calculations for end-of-service benefits follow the prescribed formulas and consider any applicable gratuity payments based on the employee's service duration.