Termination of the Contract During Trial Period in Saudi Arabia 2026

Termination of the contract during the trial period is a critical aspect of employment law in Saudi Arabia. Both employers and employees must understand the rules governing the probationary period, including the rights, obligations, and legal procedures involved. 

The Saudi Labor Law, particularly Articles 53 and 54, clearly regulates probationary periods, while Article 77 outlines the mechanisms for calculating compensation in cases of unlawful termination. Understanding these provisions ensures that both parties can exercise their rights responsibly and avoid potential legal disputes.

Termination of the Contract During the Trial Period

• When discussing the termination of an employment contract during the probationary period in Saudi Arabia, reference must be made to Article (53) of the Labor Law, which regulates this matter clearly.
• The article requires that the probationary period be explicitly stated in the employment contract, with its duration clearly defined, provided that it does not exceed a total of (180) days in all cases.
• The implementing regulations clarify the provisions related to the probationary period, including leaves that do not count its duration.
• Both the employer and the employee have the right to terminate the contract during the probationary period, provided this is stated in the contract.

Also learn about : End Of Service Calculator KSA

Conditions for terminating the contract during the probationary period

• There must be a written and duly documented employment contract between the employee and the employer.
• The probationary period must be explicitly stated in the contract, with a clearly defined duration.
• The probationary period must not exceed 90 days, with the possibility of extension, provided that the total does not exceed 180 days.
• The contract must include a clear clause allowing termination during the probationary period by one or both parties.
• Merely mentioning the probationary period is not sufficient; the right to terminate during this period must be explicitly stated.
• The right to terminate the contract is limited to the party in whose favor this right is stipulated in the contract.

What is Meant by the Probationary Period in an Employment Contract?

• The probationary period is the initial stage of the employment contract between the employee and the employer.
• Its main purpose is to assess the employee’s competence, ability to perform assigned tasks, and suitability for the role.
• It also allows the employee to evaluate whether the job is appropriate for their circumstances and capabilities.
• The probationary period must be explicitly stated in the employment contract.
• Its duration as a legally permissible trial period must be clearly defined and should not exceed (90) days, except under specific conditions that allow for extension.
• The rules and conditions governing the probationary period are fully regulated under Articles (53) and (54) of the Labor Law and its implementing regulations.

also learn about : Labour Court in Saudi Arabia

What is the New Compensation Under Article 77 in the Labor System?

Article 77 defines the mechanism for calculating the compensation owed to the party harmed by the unlawful termination of an employment contract. It covers four main types:

1. Agreed Compensation:
   • The employee and employer may agree in advance on a specific amount as compensation for unlawful termination.
   • This agreed amount is final, and no additional compensation is added, subject to the legal minimum when applicable.
   • Compensation may vary depending on which party terminates the contract, and this is usually recognized by labor courts.
2. Compensation for Termination of a Fixed-Term Contract:
   • If no agreed compensation exists, the compensation is calculated based on the full wages remaining in the contract period.
   • Example: If the contract has 6 months remaining and the monthly salary is 5,000 SAR, the compensation would be 30,000 SAR.
3. Compensation for Termination of an Indefinite-Term Contract:
   • If no agreed compensation exists, the compensation is calculated as 15 days’ wages for each year of service.
   • Example: An employee with 10 years of service and a monthly salary of 20,000 SAR would be entitled to 100,000 SAR.
4. Minimum Compensation:
   • Compensation must not be less than two months’ salary, unless a higher amount was agreed upon in advance.
   • Courts often consider any clause setting compensation below this minimum as invalid, to protect the worker’s rights under the Labor Law.

• Agreed compensation is valid even if it is less than the legal minimum, but courts may reject it if deemed unfair to the employee.
• These rules aim to protect employee rights and ensure fairness in contract termination.

Contract Termination Form During the Probationary Period

To: [Company Name]

From: Employee …
Nationality: …
Address: …
Contact Number: …

Pursuant to the employment contract concluded with your esteemed company, which includes a 60-day probationary period granting both parties the right to terminate the contract during this period, I hereby inform you of my intention to terminate the contract effective from 2026, noting that I have only worked for 35 days due to personal reasons and circumstances.

With my sincere thanks and regards,

Date: …./…./…..

Employee: …
Signature: …

Learn more about : Article 77 Saudi Labor Law

Is the Employee Entitled to Terminate the Contract During the Trial Period?

Termination of the contract during the trial period, whether initiated by the employer or the employee, is subject to specific conditions that must be met before taking any action. These conditions can be summarized as follows:

• The employment contract must be valid and in effect.
• The contract must explicitly include a clause specifying the probationary period.
• The duration of the probationary period must be clearly defined in the contract.
• The probationary period must not exceed 90 days.
• The contract must state the right of both parties to termination of the contract during the trial period.

Accordingly, an employee’s right to termination of the contract during the trial period depends on what is stipulated in the contract, as this right may be granted to one party and not the other.

Article (53) of the Labor Law states:
“…Both parties have the right to termination of the contract during the trial period unless the contract includes a provision granting the right to terminate to only one party.”

Therefore, for an employee to exercise termination of the contract during the trial period, this right must be explicitly granted in the contract.

putes.

Conclusion:
Termination of the contract during the trial period must be carried out in accordance with the conditions specified in the employment contract and the Saudi Labor Law. Consulting legal experts, such as Etqan Law Firm, can help both parties navigate the process, calculate compensation correctly, and ensure full compliance with labor regulations, thereby protecting their rights and avoiding disputes.

The Etqan Al Mutamayza Law Firm is ready to provide the essential support you need. You can reach their team at the following mobile numbers: ‎+966543104848

Additionally, feel free to visit our branches located at:

Dammam: Al-Ashri’a Street, Al-Badeea, Dammam 32415.

Jeddah: Al-Aziziyah District, Mohammed bin Abdulaziz Street (Tahlia)

Riyadh: King Abdulaziz Street, across from the Kingdom Tower

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