Separation Agreement And Release for Saudi Arabia

Separation Agreement And Release Template for Saudi Arabia

A comprehensive legal document governed by Saudi Arabian law that formalizes the termination of employment between an employer and employee. The agreement details the terms of separation, including mandatory end-of-service benefits as required by Saudi Labor Law, additional compensation, mutual releases of claims, and post-employment obligations. It ensures compliance with both Saudi Labor Law (Royal Decree No. M/51) and Sharia principles, providing legal protection for both parties while documenting the full and final settlement of all employment-related matters.

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What is a Separation Agreement And Release?

The Separation Agreement and Release is a crucial document used in Saudi Arabia when formally ending an employment relationship. It serves as a comprehensive record of the termination terms while ensuring compliance with Saudi Labor Law and Sharia principles. This document is typically used when employment is terminated by mutual consent, during restructuring, or in situations requiring a documented settlement. It includes mandatory end-of-service benefits calculations, additional compensation details, confidentiality provisions, and mutual releases. The agreement protects both employer and employee interests by clearly defining all separation terms, preventing future disputes, and ensuring all payments and obligations are properly documented as required by Saudi authorities. It's particularly important given Saudi Arabia's strict employment regulations and the need for clear documentation in employment matters.

What sections should be included in a Separation Agreement And Release?

1. Parties: Identification of the employer and employee, including full legal names and details as required under Saudi law

2. Background: Brief history of the employment relationship, including start date, position, and reason for separation

3. Definitions: Key terms used throughout the agreement, including relevant Arabic legal terms

4. Termination Date: Clear statement of the employment termination date and final working day

5. End of Service Benefits: Calculation and payment terms for mandatory end-of-service benefits under Saudi Labor Law

6. Settlement Payment: Details of all payments to be made, including salary, benefits, and any additional compensation

7. Release of Claims: Mutual release of claims compliant with Saudi law, specifically excluding non-waivable rights

8. Confidentiality: Obligations regarding confidential information and trade secrets

9. Return of Company Property: Requirements for returning all company assets and documents

10. Final Settlement: Confirmation that the agreement represents full and final settlement of all claims

11. Governing Law: Specification of Saudi law as governing law and reference to Sharia principles

12. Execution: Signature requirements and execution formalities under Saudi law

What sections are optional to include in a Separation Agreement And Release?

1. Non-Competition: Restrictions on future employment, if applicable and enforceable under Saudi law

2. Ongoing Obligations: Any continuing duties or responsibilities after termination

3. Reference: Terms regarding future employment references

4. Medical Insurance Extension: Provisions for continued medical coverage if agreed

5. Cooperation: Requirements for assistance in handover or future inquiries

6. Tax Provisions: Required for expatriate employees or international tax implications

7. Repatriation: For expatriate employees, details of repatriation arrangements

8. Dispute Resolution: Optional alternative dispute resolution procedures

What schedules should be included in a Separation Agreement And Release?

1. Schedule 1 - Payment Calculation: Detailed breakdown of all payments including end-of-service benefits calculation

2. Schedule 2 - Company Property: List of company property to be returned

3. Schedule 3 - Employee Benefits: Details of any continuing or terminating benefits

4. Appendix A - Release Form: Formal release document in Arabic and English if required

5. Appendix B - Handover Document: List of ongoing projects and handover requirements

6. Appendix C - Confidential Information: Specific definition of confidential information and trade secrets

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

Saudi Arabia

Publisher

Genie AI

Document Type

Release of Claims

Cost

Free to use

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