Saudi labor law resignation benefits, which guarantee employees’ rights upon termination of employment. Labor laws in the Kingdom of Saudi Arabia are vital laws that regulate the employment relationship between employee and employer, defining the rights and responsibilities of both parties. According to Article 79 of the Labor Law, an employee who resigns is entitled to all their guaranteed rights, including financial compensation. In this context, this article discusses the details of resignation benefits and their conditions under the Saudi Labor Law.
المحتويات
Saudi Labor Law Resignation Benefits
According to Paragraph (6) of Article (79) bis of the Labor Law, an employee whose service is terminated due to resignation is entitled to all the rights guaranteed by the law.
Referring to the provisions of the Saudi Labor Law, it is clear that upon submitting his resignation and its acceptance, the employee is entitled to all financial entitlements associated with the end of the employment relationship, such as vacation pay, overtime pay (if applicable), and back pay (if applicable). However, termination of the contract by resignation only affects the end-of-service gratuity, the amount of which is determined based on the employee’s length of service.
Article (85) of the Labor Law stipulates that, in the event of resignation, an employee is entitled to one-third of the end-of-service gratuity if his service period is no less than two consecutive years and no more than five years. If his service period exceeds five consecutive years but does not reach ten years, he is entitled to two-thirds of the gratuity. However, if his service period is ten years or more, he is entitled to the full gratuity.
Read also: Article 109 Saudi Labor Law: Employee Leave Rights & Benefits
Conditions for Submitting Resignation from Employment
When submitting a resignation from employment, the following conditions must be adhered to to ensure that the resignation process is conducted legally and smoothly:
1. No future date specified for the resignation to take effect
- Once the employer accepts the resignation, the contract is deemed terminated, and the employee is not permitted to specify a postponed date for the resignation to take effect.
2. Continued Obligations During the Notice Period
- The contract continues to be effective during the notice period, and both the employee and employer are required to fulfill all obligations and duties agreed upon in the contract.
3. Response to Resignation Within a Specified Period
- The employer must respond to the resignation request within 30 days of its submission. If no response is received within this period, the resignation is automatically considered accepted.
It is important to consult a lawyer specializing in labor law before submitting a resignation or signing any contract, to ensure you fully understand your rights and obligations.
Check out: The Saudi Labor Law: Key Regulations & Employee Rights
Resignation from an Indefinite-Term Contract
According to Article 75 of the Saudi Labor Law, either party (the employee or the employer) may terminate an indefinite-term contract provided that:
- The termination is based on a legitimate reason.
- Written notice is given to the other party prior to the termination period specified in the contract, taking into account the following legal periods:
If the contract is indefinite and wages are paid monthly:
- If the employee decides to terminate the contract, they must notify the employer 30 days prior to the termination date.
- If the employer decides to terminate the contract, they must notify the employee 60 days prior to the termination date.
If the contract is of an indefinite term and wages are not paid monthly:
- The party intending to terminate the contract (whether the employee or the employer) must provide written notice at least 30 days prior to the termination date.
Compensation for Failure to Comply with the Notice Period
According to Article 76 of the Labor Law, if either party terminates an indefinite-term contract without respecting the notice period stipulated in Article 75, they are obligated to pay compensation to the other party equivalent to the employee’s wage for the notice period, unless a higher compensation is agreed upon.
It is essential to review the details of the employment contract and understand its provisions related to resignation and notice to avoid any future legal disputes.
How to Calculate End-of-Service Gratuity Upon Resignation?
The end-of-service gratuity payable to an employee upon resignation under the Saudi Labor Law resignation benefits is determined based on their length of service with their employer in the private sector, as follows:
1. If the length of service is less than two years
In this case, the employee is not entitled to an end-of-service gratuity.
2. If the length of service is between two and five years
The employee is entitled to one-third of the end-of-service gratuity. For example, if the full gratuity due based on the employee’s salary and length of service is 3,000 riyals, the employee is entitled to 1,000 riyals upon resignation.
3. If the length of service is more than five years but less than ten years
In this case, the employee is entitled to two-thirds of the end-of-service gratuity. For example, if the full gratuity due to the employee is 3,000 riyals, the employee is entitled to 2,000 riyals upon resignation.
4. If the employee has completed ten years of service or more
The employee is entitled to the full end-of-service gratuity. That is, if the gratuity due based on the length of service and the employee’s salary is 3,000 riyals, the employee will receive the full amount upon resignation.
Learn about: Complete Guide to the employment contract in Saudi Arabia
Period for Receiving Benefits after Resignation
The employer must settle all employee benefits within a maximum of one week from the date the employment relationship ends as a result of the resignation. This includes any entitlements outlined under Saudi labor law resignation benefits, such as end-of-service gratuity, pending salaries, and unused leave compensation. Article (88) of the Labor Law states: “Upon termination of an employee’s service, the employer must pay his wages and settle his entitlements within a period not exceeding one week from the date the contract ends.”
In conclusion, understanding Saudi labor law resignation benefits and their associated conditions is essential for every employee in the Kingdom of Saudi Arabia. The Saudi Labor Law reflects the government’s commitment to protecting workers’ rights and ensures that they receive their entitlements upon termination of employment. It is important for employees to be aware of all legal provisions related to resignation, including entitlement to end-of-service gratuity. Therefore, it is always advisable to consult with a labor lawyer before taking the steps to resign to ensure their rights are protected and avoid any future legal disputes.
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:
- 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.
FAQ
What is the rules for resignation in Saudi Arabia?
Resignation Rules in Saudi Arabia:
Notice Period:
Indefinite contract: 30 days’ notice (if paid monthly) or 15 days (if paid otherwise).
Fixed-term contract: Resignation before contract ends requires mutual agreement or valid reason.
End-of-Service Benefits:
Based on the length of service.
Probation Period:
No benefits unless stated in the contract.
Employer’s Obligation:
Must settle dues within one week of resignation (Article 88).
What are the final exit benefits in Saudi Arabia?
The final exit benefits typically include:
End-of-Service Benefits: Based on the employee’s length of service (explained below).
Unpaid Wages: Any outstanding salaries must be paid before final exit.
Vacation Pay: Payment for unused vacation days.
Overtime Pay: Payment for any overtime work (if applicable).
Airfare: In some cases, the employer may cover the cost of a flight ticket for the employee’s return to their home country (if stated in the contract).
What is Article 81 Saudi Labor Law for resignation?
Article 81 of the Saudi Labor Law allows an employee to resign without serving a notice period or losing benefits if the employer breaches the terms of the contract or commits serious violations, such as:
Failure to pay wages on time.
Assault or mistreatment of the employee.
Forcing the employee to perform duties outside the agreed scope of work.
Unsafe working conditions that endanger the employee’s health or safety.
If any of these violations occur, the employee can resign immediately and still retain their full end-of-service benefits.
Does Saudi Arabia give benefits?
Yes, Saudi Arabia provides various benefits to employees under the Saudi Labor Law, including:
1- End-of-Service Benefits: Based on the duration of service and reason for termination.
2- Health Insurance: Mandatory for all private-sector employees.
3- Annual Leave: Employees are entitled to 21 to 30 days of paid annual leave depending on their length of service.
4- Sick Leave: Employees are entitled to up to 120 days of sick leave per year (partially paid).
4- Public Holidays: Employees are entitled to paid leave during public holidays.
5- Overtime Pay: Employees are entitled to overtime pay for work beyond regular hours.
6- Flight Tickets: In some cases, the employer must provide a return ticket upon contract completion.