Employee Rights at the End of an Employment Contract in Saudi Arabia

When an employment contract ends in Saudi Arabia, the employee is generally entitled to their wages up to the last working day, the end-of-service award where its conditions are met, payment for unused annual leave, and a service certificate free of charge, as well as compensation in cases of unlawful termination. The details of these rights vary depending on the type of contract and the reason it ended.

Knowing these rights in advance helps you review your final settlement with confidence, prevents you from signing anything that reduces your entitlements, and enables you to act quickly if payment is delayed.

How Does an Employment Contract End?

The reason the contract ends determines many of your rights. The most common ways a contract ends are:

• Expiry of a fixed-term contract without renewal.
• Termination of an indefinite contract by either party with the statutory notice.
• Resignation by the employee.
• Dismissal by the employer, with or without a legitimate reason.
• Mutual agreement to terminate.

What Financial Entitlements Does the Employee Have?

Outstanding wages

The employee is entitled to their full wage for the days worked up to the date the relationship ends, and any amounts outstanding from earlier periods, such as overtime pay due. It is advisable to check this against bank statements and payroll records to make sure there are no discrepancies.

End-of-service award

This is calculated under the Labour Law rule: half a month's wage for each of the first five years and a month's wage for each year thereafter, based on the last wage, with special rules where the employee resigns. For details, read our guide to the end-of-service award.

Payment for unused leave

If the relationship ends while the employee has an unused balance of annual leave, they are entitled to payment for it based on the applicable wage. So keep a record of your leave and how much you have used.

Compensation for unlawful termination

If the employer terminates the contract without a legitimate reason, the employee may be entitled to compensation as set by the contract or the law, in addition to the award.

What Non-Financial Rights Does the Employee Have?

• Service certificate: the employer must give the employee, at the end of the contract and free of charge, a certificate stating the date they joined, the date their service ended and their occupation.
• Return of documents: the employee is entitled to recover any original certificates or documents deposited with the employer.
• Repatriation arrangements for non-Saudi employees: the employer bears the cost of returning an expatriate employee to their home country in the cases provided for by the law.
• Updating records on the official platforms: so that the employee can move to a new job lawfully.

When Must the Employer Pay the Final Entitlements?

The law requires the employer to pay the employee's entitlements within a specified period from the end of the relationship, and this period differs depending on which party ended the contract. Because these periods may be amended, we recommend referring to the current text of the Labour Law. The employer may not withhold entitlements or require the employee to waive their rights in exchange for payment.

What Should You Do If You Do Not Receive Your Rights?

1. Request a detailed final settlement: showing each item of your entitlements and how it was calculated, and do not sign a final settlement before confirming it is correct.
2. Document everything: keep your employment contract, payroll records, correspondence and the termination notice.
3. Submit an amicable settlement request: through the electronic services of the Ministry of Human Resources and Social Development.
4. File a labour claim: if settlement fails, the claim is referred to the Labour Court.

Remember that labour claims are subject to statutory time limits for being heard, and delay may cost you your right.

Do Rights Differ Between Resignation and Dismissal?

Yes, the reason the relationship ends affects several rights. An employee who resigns is subject to special rules on the end-of-service award linked to their length of service, and must also observe the agreed or statutory notice period. An employee dismissed without a legitimate reason may be entitled to compensation for termination in addition to the award. On the other hand, if an employee is dismissed for one of the legitimate reasons specified in the law, they may lose some of their rights. It is therefore advisable to understand the consequences before resigning or signing any document relating to the end of the relationship.

Frequently Asked Questions

Q: Can my employer make deductions from my final entitlements? A: Deductions are permitted only in the cases specified by the law, such as recovering a proven loan owed to the employer, and within the statutory limits.

Q: I signed a final settlement and then discovered a shortfall in my entitlements. What should I do? A: It depends on the wording of the settlement and the circumstances in which it was signed. It is advisable to show it to a lawyer as soon as possible to assess whether a claim is possible.

How Can We Help?

FATIMA AL ASMARI Law & Intellectual Property Company in Jeddah helps employees and employers across all regions of the Kingdom review final entitlements and employment contracts. Explore our legal consultations for individuals or book your consultation.

Legal sources

This article is for general awareness and is not legal advice.