Notification Letter For End Of Contract Template for Saudi Arabia

When you need to terminate an employment contract in Saudi Arabia, you must provide formal written notice to your employee through a Notification Letter For End Of Contract. This document serves as official proof of your termination decision and ensures compliance with Saudi Labor Law requirements. The letter protects both parties by clearly documenting the termination terms, notice period, and final entitlements.

When do you need this document?

You need this notification letter whenever you decide to end an employment relationship with any employee in Saudi Arabia. This includes situations such as terminating unlimited-term contracts due to business restructuring, ending fixed-term contracts early, or concluding employment due to poor performance or misconduct. The document is also required when employees reach retirement age or when mutually agreeing to end the employment relationship. Additionally, you must use this letter if you're implementing company-wide layoffs or closing specific departments or branches.

Key legal considerations

Your notification letter must include several critical elements to ensure legal validity. You must clearly state the termination decision, specify the exact last working day, and reference the legal basis for termination under Saudi Labor Law. The document should detail the employee's end-of-service benefits calculation according to Articles 84-88, including any accrued vacation days, overtime payments, and gratuity entitlements. You must also address the return of company property, confidentiality obligations, and any non-compete clauses that remain in effect. Failure to include these elements could result in legal disputes or penalties from labor authorities.

Legal requirements in Saudi Arabia

Under Saudi Labor Law, you must provide minimum notice periods based on the employee's payment frequency and contract type. Article 74 mandates 60 days' notice for monthly-paid employees and 30 days for others paid more frequently. The notification must be in writing and delivered through official channels with proof of receipt. You must calculate end-of-service benefits according to the employee's length of service and final salary, as specified in Articles 84-88. The letter should reference relevant articles from Royal Decree No. M/51 and comply with Ministerial Resolution No. 70273 regarding format requirements. Additionally, you must ensure the notification is issued on official company letterhead and signed by an authorized company representative to maintain legal validity.