Termination Without Cause Letter Template for Saudi Arabia

When you need to terminate an employee's contract without specific cause in Saudi Arabia, a properly drafted Termination Without Cause Letter is essential for legal compliance and professional communication. This document serves as official notice of employment termination while ensuring you meet all requirements under Saudi Labor Law.

When do you need this document?

You need a Termination Without Cause Letter when restructuring your organization, reducing workforce due to economic conditions, eliminating positions, or when an employee's role is no longer required despite satisfactory performance. This letter is also necessary when ending probationary employment, concluding temporary assignments that have become permanent, or terminating contracts during business downsizing. Unlike termination for cause, this document is used when the employee has not committed any misconduct or breach of contract.

Key legal considerations

Your termination letter must clearly state that termination is without cause and reference the relevant employment contract provisions. You must specify the exact notice period as required by Saudi Labor Law - typically 30 days for monthly paid employees or 15 days for others paid differently. The letter should detail end-of-service benefit calculations based on the employee's salary and length of service, following Articles 84-88 requirements. Include information about final payment processing through the Wage Protection System (WPS) and settlement of social insurance contributions. You must also address the return of company property, confidentiality obligations, and any non-compete restrictions that remain in effect post-termination.

Legal requirements in Saudi Arabia

Under Saudi Labor Law (Royal Decree No. M/51), you must provide minimum notice periods as specified in Article 75, with 30 days being standard for monthly paid workers. Your letter must comply with end-of-service benefit provisions under Articles 84-88, calculating payments based on half a month's salary for each of the first five years and one month's salary for each subsequent year. You must process final settlements through the approved Wage Protection System (WPS) and ensure proper handling of social insurance obligations. The document should include your company letterhead, reference numbers, and the employee's complete details including ID number and position. All communications must be in Arabic or include Arabic translation for legal validity.