Termination Without Cause Contract Template for Saudi Arabia

A Termination Without Cause Contract is a legal document that formally ends an employment relationship in Saudi Arabia when the termination is not related to employee misconduct or poor performance. This contract ensures that both you as an employer and your employee understand the terms of separation while maintaining full compliance with Saudi Labor Law requirements.

When do you need this document?

You need this contract when conducting organizational restructuring, downsizing operations, or eliminating positions due to business strategy changes. It's also required when closing departments, relocating operations outside Saudi Arabia, or implementing cost-reduction measures that affect staffing levels. The document becomes essential during mergers and acquisitions where duplicate roles are eliminated, or when technological changes render certain positions obsolete. You must use this contract whenever terminating an employee for reasons beyond their control or performance, ensuring proper legal protection for both parties.

Key legal considerations

Your contract must include specific notice periods as mandated by Article 75 of Saudi Labor Law, which requires 60 days' notice for unlimited-term contracts or 30 days for limited-term contracts. You must calculate and specify end-of-service benefits according to Articles 84-88, including half a month's salary for each of the first five years and one month's salary for each subsequent year. The document should address final settlement procedures, including payment of accrued vacation days, overtime compensation, and any outstanding allowances. You need to include provisions for handover procedures, return of company property, and post-termination confidentiality obligations to protect your business interests.

Legal requirements in Saudi Arabia

Saudi Labor Law requires written notification of termination, making this contract legally mandatory rather than optional. Your document must comply with Ministry of Human Resources and Social Development regulations, including proper Arabic language requirements for Saudi national employees. The contract should reference relevant provisions of Royal Decree No. M/51 and ensure alignment with Shariah principles governing employment relationships. You must maintain copies for labor inspection purposes and ensure the termination process follows established procedures outlined in the Implementing Regulations of the Labor Law. The contract should also address any visa cancellation procedures for expatriate employees and coordinate with relevant government agencies for proper documentation.