Termination By Agreement Template for Saudi Arabia

When you and your employer decide to part ways amicably in Saudi Arabia, a Termination By Agreement document ensures your separation is legally sound and protects both parties' interests. This formal agreement creates a clear record of your mutual decision to end the employment relationship while addressing all financial and legal obligations under Saudi Labor Law.

When do you need this document?

You need a Termination By Agreement when both you and your employer want to end your employment relationship voluntarily before your contract's natural expiration. This situation commonly arises during corporate restructuring where positions are eliminated but employees aren't being dismissed for cause. You'll also need this document when pursuing career opportunities that require an immediate start date, when personal circumstances require you to leave Saudi Arabia, or when your employer offers voluntary separation packages during downsizing. The document becomes essential if you're an expatriate employee, as it helps coordinate your employment termination with visa cancellation and exit procedures required by Saudi authorities.

Key legal considerations

Your agreement must clearly specify the termination date and confirm that both parties are ending the relationship voluntarily without coercion. The document should detail your final settlement, including any outstanding salary, unused annual leave compensation, and most importantly, your end-of-service benefits calculated according to Articles 84-88 of Saudi Labor Law. You need to address confidentiality obligations, non-compete restrictions if applicable, and the return of company property. The agreement should include a mutual release clause where both parties waive claims against each other, though this cannot override your statutory rights under Saudi labor regulations. If you have access to company systems or confidential information, the document must specify when this access will be terminated and your ongoing obligations to protect proprietary information.

Legal requirements in Saudi Arabia

Under Saudi Labor Law (Royal Decree No. M/51), your termination agreement must comply with minimum notice periods and end-of-service benefit calculations based on your length of service and final salary. The document must be clear about final payment timing, as the Wage Protection System (WPS) requires employers to settle all dues promptly. Your agreement should reference compliance with Saudi Social Insurance Law regarding the settlement of GOSI contributions and benefits. For expatriate employees, the document must coordinate with visa cancellation procedures and specify responsibilities for exit visa processing. The agreement should be signed by authorized representatives from both sides, and witness signatures may be required depending on your company's internal policies. All parties must retain signed copies for their records, and the document should be available in both Arabic and English if you don't read Arabic fluently.