End of Service Benefits Saudi Labor Law: Rights After Contract Termination

End of service benefits Saudi labor law is considered one of the most important rights that a worker obtains after the end of his employment relationship with the employer, as this gratuity constitutes an important source of financial security and psychological stability for the worker, especially after years of work and diligence. It is a fair compensation for the efforts he made throughout his service period, which enhances his sense of satisfaction and confidence in the work law.

In this article, we will talk in detail about the Saudi labor law end of service benefits​, as we will explain how to calculate the benefits, the conditions that must be met to obtain it, in addition to the cases that may lead to the worker being deprived of it.

Conditions for Receiving End of Service Benefits Saudi Labor Law 

The law did not specify strict criteria that must be met to be eligible for the end-of-service gratuity, but it set clear controls for calculating it in accordance with Article 84. Based on practical experience and dealing with many cases, the basic conditions for obtaining this gratuity can be summarized as follows:

1. End of the contractual relationship

The gratuity is not due until the relationship between the two parties ends, whether by the end of a fixed-term contract, or an indefinite-term termination with notice, or by other methods stipulated in the law. It is necessary to ensure that there is conclusive evidence of the end of the relationship, such as a written document, an electronic message, a witness testimony, or any other means proving this.

Read also: Saudi Labor Law Vacation Pay: A Comprehensive Guide

2. Not being dismissed for serious disciplinary reasons

End of service benefits Saudi labor law is not granted for the worker if he is dismissed for one of the reasons mentioned in Article 80, which include serious breach of work or infringement of the employer’s rights, as this is considered a legitimate protection to preserve the work environment.

3. The reason for the termination of the employment contract is not resignation

The gratuity is not completely canceled in the event of resignation, but its conditions and value differ. It is required to have more than two years of service, and the percentage is calculated based on the total years of work as determined by the law.

4. Non-negotiable statutory right

The end-of-service gratuity is not a privilege granted by the employer, but rather a statutory right that is obligated upon the termination of the contractual relationship. Any other gratuities granted by agreement between the two parties do not affect the gratuity stipulated by the law, as each is dealt with independently.

5. It is not permissible to agree to waive it

The employer may not include any condition in the contract that exempts him from paying the end-of-service gratuity, as this condition is considered void according to Article 8, which stipulates that any agreement that violates the provisions of the law is void unless it is more beneficial to the worker.

6. Failure to pay the gratuity during the continuation of the relationship

Some employers resort to paying the gratuity partially or 

periodically during the continuation of the contractual relationship to reduce future financial burdens. However, the original is that the gratuity is paid after the end of service and not before that, according to the statutory rules.

Cases of Deprivation of End of Service Benefits

The end of service benefits is an inherent right of the employee, and he can only be deprived of it in exceptional cases exclusively stipulated by the law, according to Article 80. This restriction comes due to the importance of the benefits as a regulatory obligation that may not be dropped except for essential reasons that require it. The following are the most prominent cases that lead to the employee losing his end of service benefits:

1. Assault on others in the work environment: If the employee assaults his manager or colleagues, whether the assault is verbal or physical, this is considered a legitimate reason to end the relationship without entitlement to the benefits, in order to maintain a safe work environment.
2. Serious breach of job duties: Failure to perform essential tasks, or failure to comply with essential instructions, is considered a legal reason to terminate the contract without benefits, due to the negative impact it has on the workflow.
3. Committing unethical or dishonest behavior: Any act that violates honor or honesty inside or outside the scope of work, affecting mutual trust, justifies termination of service without entitlement to benefits.
4. Causing significant financial losses: If the employee causes significant financial losses as a result of gross negligence or deliberate action, and the incident must be reported within 24 hours of its discovery, the relevant authority has the right to terminate the relationship without benefits.
5. Proof of forgery in employment documents: If it is found that the employee obtained the job using forged documents or data, he loses his right to benefits, as this is considered a flagrant iolation of the principles of integrity.
6. Terminating the relationship during the probation period: During the pre-determined probation period, the contract can be terminated without obligation to pay the end of service benefits, as the period is allocated to assessing efficiency and job suitability.
7. Unjustified absence from work: If the absence exceeds 30 intermittent days or 15 consecutive days without a legitimate reason, and with a written warning after 20 intermittent days or 10 consecutive days, the service may be terminated without compensation.
8. Exploiting the job to achieve personal gain: Any illegal use of the job position for the purpose of achieving a direct or indirect personal benefit is a breach of job integrity and justifies termination of the contract without compensation.
9. Disclosure of confidential information: Leaking business secrets or any sensitive information is considered a serious violation that leads to termination of the relationship without entitlement to compensation, given the importance of data confidentiality in different work environments.

Check out: Article 77 Saudi Labor Law: Employee Compensation Rights

Conclusion

end of service benefits Saudi labor law are essential for ensuring financial stability and fairness for employees after their service ends. They acknowledge the worker’s dedication and contributions while reinforcing confidence in labor rights. However, understanding the exact conditions, calculations, and legal implications can sometimes be complex. To ensure you receive your full entitlements and navigate any disputes effectively, it’s always best to seek expert legal guidance. Etqan Law Firm specializes in labor law matters and can provide the professional support needed to protect your rights. Consulting experienced legal professionals can make all the difference in s The Etqan Al Mutamayza Law Firm can provide the necessary support. You can contact their team

• through the following mobile numbers: 056113776, 0541110440, 504315333

Alternatively, you can visit our branches:

Learn about: The Saudi Labor Law: Key Regulations & Employee Rights

• Jeddah: Al-Aziziyah District–Mohammed bin Abdulaziz Street (Tahlia)
• Riyadh: King Abdulaziz Street – In front of Kingdom
• Dammam: Al-Ashri’a Street, Al-Badeea, Dammam 32415.
• ecuring what you rightfully deserve.

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