The Termination of Service Agreement is a critical document used when ending employment relationships in Saudi Arabia, whether through mutual agreement, resignation, or employer-initiated termination. This document serves to formalize the termination process while ensuring compliance with Saudi Labor Law and Shari'ah principles. It includes essential details such as the termination date, final settlement calculations, end-of-service benefits, and mutual releases. The agreement is particularly important in the Saudi context due to strict labor regulations and the need for clear documentation of employment termination. It helps protect both employer and employee interests by clearly stating all rights, obligations, and financial settlements, while ensuring adherence to local legal requirements regarding notice periods, benefit calculations, and post-employment obligations.
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Key Requirements PROMPT example:
Termination Of Service Agreement
"I need a Termination of Service Agreement for our Chief Technology Officer who has agreed to a mutual separation effective March 15, 2025, including provisions for a 6-month consulting arrangement and protection of our intellectual property rights under Saudi law."
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1. Parties: Identification of the employer and employee, including full legal names, addresses, and relevant identification numbers
2. Background: Brief context of the employment relationship, including original employment date and position
3. Definitions: Key terms used in the agreement, including specific Saudi legal terminology
4. Termination Date: Clear specification of the effective date of termination and last working day
5. Reason for Termination: Statement of the grounds for termination in accordance with Saudi Labor Law
6. Final Settlement: Details of all financial entitlements including salary, end-of-service benefits, and other dues as per Saudi Labor Law
7. Company Property: Requirements for return of company assets, documents, and other property
8. Release and Waiver: Mutual release of claims subject to completion of final settlement
9. Governing Law: Confirmation of Saudi Law application and jurisdiction
10. Execution: Signature blocks and execution requirements
1. Non-Competition: Restrictions on future employment, if applicable and agreed (subject to Saudi law limitations)
2. Confidentiality Obligations: Ongoing obligations regarding confidential information post-termination
3. Transition Arrangements: Process for handover of duties and responsibilities
4. References: Agreement on the nature and content of employment references
5. Visa and Immigration: Arrangements regarding work permit cancellation for expatriate employees
6. Outstanding Leave: Treatment of accrued but unused leave entitlements
7. Continuing Obligations: Any obligations that survive termination
1. Schedule 1 - Final Settlement Calculation: Detailed breakdown of all financial entitlements including salary, end-of-service benefits, and other dues
2. Schedule 2 - Company Property Inventory: List of all company property to be returned
3. Schedule 3 - Outstanding Obligations: List of any outstanding obligations or commitments
4. Appendix A - Original Employment Contract: Copy of the original employment contract for reference
5. Appendix B - Employee Clearance Form: Standard form confirming return of company property and settlement of dues
Authors
Relevant legal definitions
Agreement
Business Day
Company
Confidential Information
Effective Date
Employee
Employment Contract
End of Service Benefits
Final Settlement
Governing Law
Last Working Day
Notice Period
Original Employment Date
Parties
Position
Restricted Business
Saudi Labor Law
Settlement Amount
Termination Date
Company Property
Working Hours
Basic Salary
Allowances
Release
Claims
Obligations
Territory
Intellectual Property Rights
Consent
Clearance Certificate
End of Service Certificate
Business Day
Company
Confidential Information
Effective Date
Employee
Employment Contract
End of Service Benefits
Final Settlement
Governing Law
Last Working Day
Notice Period
Original Employment Date
Parties
Position
Restricted Business
Saudi Labor Law
Settlement Amount
Termination Date
Company Property
Working Hours
Basic Salary
Allowances
Release
Claims
Obligations
Territory
Intellectual Property Rights
Consent
Clearance Certificate
End of Service Certificate
Clauses
Interpretation
Termination Date
Final Settlement
End of Service Benefits
Notice Period
Return of Property
Confidentiality
Non-Competition
Non-Solicitation
Release and Waiver
Full and Final Settlement
Outstanding Obligations
References
Tax Obligations
Further Assurance
Severability
Governing Law
Dispute Resolution
Entire Agreement
Amendment
Counterparts
Notices
Language
Compliance with Laws
Survival
Third Party Rights
Assignment
Force Majeure
Costs
Acknowledgment
Termination Date
Final Settlement
End of Service Benefits
Notice Period
Return of Property
Confidentiality
Non-Competition
Non-Solicitation
Release and Waiver
Full and Final Settlement
Outstanding Obligations
References
Tax Obligations
Further Assurance
Severability
Governing Law
Dispute Resolution
Entire Agreement
Amendment
Counterparts
Notices
Language
Compliance with Laws
Survival
Third Party Rights
Assignment
Force Majeure
Costs
Acknowledgment
Relevant Industries
Banking & Finance
Construction
Healthcare
Manufacturing
Oil & Gas
Professional Services
Real Estate
Retail
Technology
Telecommunications
Transportation & Logistics
Education
Hospitality
Relevant Teams
Human Resources
Legal
Compliance
Senior Management
Operations
Administration
Finance
Corporate Secretariat
Relevant Roles
HR Manager
HR Director
Legal Counsel
Company Secretary
Chief Human Resources Officer
Employment Law Specialist
HR Business Partner
Compliance Officer
Personnel Manager
HR Operations Manager
Chief Legal Officer
Managing Director
CEO
Department Head
Line Manager
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