Saudi Labor Law (Royal Decree No. M/51) provides employees with meaningful protection against arbitrary or unjust termination. Understanding the difference between lawful and unlawful dismissal — and the remedies available to you — is essential if you believe your employment was ended without justification.
What Is Wrongful Termination Under Saudi Law?
An employer may terminate an employee for cause under Article 80 of the Saudi Labor Law, which lists specific grounds including serious misconduct, repeated failure to perform duties, and unauthorised absence. Termination without cause — or for reasons not listed in Article 80 — is considered arbitrary dismissal under Article 77. Employers must also follow the required notice period (60 days for monthly-paid employees) unless the dismissal falls under Article 80.
Your Rights If You Are Wrongfully Dismissed
Under Article 77, an employee who is arbitrarily dismissed is entitled to compensation equivalent to two months' wages for each year of service, in addition to the full end-of-service gratuity (one month's salary per year for the first five years, and one and a half months' salary per year thereafter). You are also entitled to any unused annual leave pay and wages owed up to the termination date.
End-of-Service Benefits (Gratuity)
Regardless of the reason for termination — unless you are dismissed under Article 80 — you are entitled to an end-of-service gratuity (Mak'afat Nihayat Al-Khadamah). The calculation is: one-third of a month's salary per year for the first two years, two-thirds for years three to five, and a full month's salary per year thereafter. Employees who resign before two years of service forfeit their gratuity; resignation between two and five years entitles you to one-third; resignation after five years entitles you to the full amount.
Filing a Claim: Process and Deadlines
Employment disputes in Saudi Arabia must first be referred to the Ministry of Human Resources and Social Development (HRSD) for amicable settlement. If no settlement is reached within 21 days, the dispute is referred to the Labour Tribunals. Critically, claims must be filed within 12 months of the date of termination — missing this deadline may bar your claim entirely. Do not delay in seeking legal advice.
Practical Steps to Take Immediately
Preserve all evidence: your employment contract, payslips, HR correspondence, performance reviews, and any communications regarding your termination. Do not sign any settlement agreement or waiver without independent legal advice — employers sometimes present waivers framed as routine administrative paperwork. A Saudi employment lawyer can assess your entitlements before you take any step.