Saudi Arabia offers various privileges to employees and the workforce according to Saudi Labor Law. In addition, you can acquire maximum benefits by working in Saudi Arabia as it is the hub of work opportunities in the Middle East region. The foreigners must acquire a local sponsor for a work permit. A legally registered company in Saudi Arabia must act as the local sponsor.
Various human resource outsourcing agencies provide their services for hiring and onboarding foreign employees and the workforce in Saudi Arabia. They can provide top multi-talent from various resources for work in the Saudi Kingdom.
We have previously discussed the hiring, onboarding, and visa process. In this article, we discuss the resignation, termination of contract, or Saudi labor law end of service.
Overview of Resignation in Accordance with Saudi Labor Law
The resignation, termination process, or Saudi labor law termination of the contract by the employee has further steps to follow to ensure the framework of labor law. Secure the protection rights for employer and employee or workers in Saudi Arabia.
This process has specific aspects for resignation. Including a notice period, requirements, valid reasons, and the entitlements to the end of service and its benefits. You must comply with the legal process to avoid inconvenience by the law of the kingdom.
Type of Contract by the Saudi Labor Law
Two types of contracts are defined by the Saudi labor law; one is open-ended contracts and the other is fixed contracts.
Open-Ended Contracts: The employment terms are not clearly defined in these contracts, resulting in open-ended agreements. In this term, these types of contracts are also called permanent or indefinite employment contracts with no fixed employment tenure agreement. These contracts can be renewed.
Fixed Contracts: This type of contract has a fixed employment tenure, and it will end automatically on the specified date mentioned in this contract.
Notice Period
Open-Ended Contract Notice Period: This type of contract has a sixty-day notice period, as mentioned in the Saudi labor law article seventy-five. So the employer and employee are both required to give notice before terminating the contract.
Fixed Contract Notice Period: The Employer does not need to provide any notice for this type of contract as the term of service will be automatically ended on the given date in the fixed contract. If the employees need to end this contract before the given date, so they must issue a thirty-day notice period in Saudi Arabia.
Resignation or Termination Notice
The employer and employee must write the resignation or termination notice, specifying the reasons for the action. The reasons for resignation and termination must be harmless for the employer and employee and valid according to the terms of the contract.
However, if the employer terminates any employee before the date mentioned in the contract for the end of service. It is considered a Breach of Employment Contract as per Saudi labor law.
Salary Disbursement
In case of early termination by the employer before the date stated in the contract. The employer is subjected to pay the two-month salary to an employee as compensation according to Saudi labor law.
End-of-Service Benefits
The employer must pay the end-of-service benefits to Saudi labor law article eighty-four to the employee who has been working in the company for five years of service or more. The end-of-service must be accumulated by half the amount of monthly compensation or wages.
The basic salary can be the last salary issued to the employees. The labor law states that the employer should not terminate the employee or worker due to health issues or sickness. The employee can have sick leaves with annual leaves for employment safety.
Critical Legal Articles and Their Ramifications in Saudi Labor Law
The latest Saudi labor law clarifies the legal articles for the employment resignation and termination process. These articles provide all the essential guidelines for the security of employees and employers and clarify the obligations of the process. These articles have a great impact on employment and workspaces.
Article 84: Instant Resignation under Specific Conditions in Saudi Labor Law
This article implies the condition when an employee resigns immediately without any notice period to the employer. This condition applies to specific conditions and circumstances without complying with the legal obligations.
This type of incident implies that an employer can terminate the employee immediately. If there is a breach of contract or assault of the superior management or authorities of the company by the employee in such cases.
Article 85: End-of-Service Facilities and Benefits in Saudi Labor Law
This article implies the rights of workers and employees to obtain the facilities and benefits at the end of service or resignation. This article ensures that the employees will receive a certain amount of compensation at the resignation or end of service.
This compensation is based on the employment period and last salary to ensure the security of workers and employees according to the Saudi labor law.
Article 87: Formal Procedure for Resignation Benefits in Saudi Arabia
This article implies for resignation process for the employees. The law defines that the resignation must be in writing by clearly defining the reasons for resigning and the notice period as per the employment contract and Saudi labor law.
Practical Guidance for Employees Handling Resignation
- These are a few points that provide practical guidance for handling resignations from employees according to the Saudi labor law.
- I must submit my resignation in writing.
- The date of resignation, last working day, and the reason must be clearly stated in the resignation.
- The notice period must be stated clearly in the resignation according to Saudi labor law.
- Employees must carefully receive their compensation and benefits for the end of service.
- The employer must know about the resignation and the notice period.
- The employer formally acknowledged the resignation in writing.
- The employer must confirm the notice period as per Saudi labor law.
- The employer must calculate accurately the compensation and benefits for the end of the service and ensure timely payments to the employees.
- The compensation is based on the service period and the last salary of the employees. The Saudi labor law requires that all payments be made on time to ensure a smooth process and avoid inconvenience for both parties.
Seeking a Company Offering Suitable HR Solutions for Employee Termination Assistance?
PEO Middle East offers the best HR assistance and outsourcing services for employee end-of-service and termination processes in Saudi Arabia. If you are seeking HR solutions for the employee resignation, termination, and end-of-service process for smooth transitions. We are here to help you with a team of experts and skilled professionals.
Conclusion
New Saudi Labor law ensures the security and safety of both employees and employers. In terms of resignation, end-of-service, or termination. Both parties must comply with laws and regulations to avoid inconvenience and facing legal obligations in the Kingdom of Saudi Arabia.
FAQs
What is the rule for resigning in Saudi Arabia?
The employee must provide a sixty-day notice period for the resignation in open-ended employment contracts and a thirty-day notice period for fixed employment contracts.
What is Article 77 of the KSA Labor Law?
Article seventy-seven of Saudi labor law ensures that employees receive fair compensation on the end-of-service or termination. According to the terms and conditions to secure the employees’ financial rights in Saudi Arabia.
What is termination without cause in Saudi?
No immediate termination is allowed without a cause. However, the employee takes action for instant termination in case of a Breach of the contract or assaults the management authorities and superior bodies of the company by the employee.
