Saudi employment termination: the record must precede the decision

The termination letter should be the last document prepared, not the first.

In a Saudi employment matter, the defensibility of a termination decision often turns on whether several records describe the same legal event: the employment contract, its documented platform record, the employer’s work regulations, the evidence supporting the stated reason, the disciplinary or performance process, the notice analysis, and the final entitlement calculation.

A short letter cannot repair contradictions between those records. Nor can a broad phrase such as “termination for a legitimate reason” select the correct legal route.

This note examines the steps involved in preparing the decision under official Ministry of Human Resources and Social Development materials available on 14 August 2026. It is general information. The correct route depends on the contract, worker, facts, procedure and current official record.

The governing question is not whether employment should end

Management may have reached a commercial decision that the relationship cannot continue. Legal analysis asks a different question: by which recognised route will the contract end, and what follows from that route?

The Ministry’s current publication of the Labor Law provisions identifies multiple termination events under Article 74, including written mutual agreement, expiry of a fixed term, unilateral termination of an indefinite-term contract in accordance with Article 75, resignation, retirement, force majeure, permanent closure, cessation of the activity in which the worker is employed, and other cases provided by law.

Article 80 addresses specified circumstances in which an employer may terminate without an end-of-service award, advance notice or compensation, subject to its conditions. Article 81 separately identifies circumstances in which a worker may leave without notice while retaining statutory rights.

1. Reconcile the contract before classifying the termination

The review should begin with the signed contract and the version documented through the applicable Ministry system, including Qiwa where relevant.

Confirm:

• whether the contract is fixed-term or indefinite-term;
• the original term and every renewal;
• the worker’s nationality and the relevance of Article 37;
• the commencement date and continuity of service;
• the probation clause and whether probation remains available;
• the agreed role, location, wage, benefits and allowances;
• any contractual notice or compensation clause; and
• any amendment, transfer or change in employer.

The Ministry’s Labor Relations publication states that the standard contract contains core particulars including the parties, wage and allowances, type and location of work, commencement date, duration where fixed, and basic rights and obligations. It also permits additional clauses provided they do not conflict with the Labor Law, regulations and implementing decisions.

The practical conclusion is Temairik Law’s analysis: the employer should not classify the exit from an offer letter, payroll entry or internal HR summary where the signed and documented contract says something different.

2. State the legal route and the material facts separately

The decision file should contain two short propositions:

1. the legal route relied upon; and
2. the material facts said to satisfy that route.

If an employer relies on expiry, the file should establish the term, renewal position and whether work continued. If it relies on an indefinite-term termination, it should address the legitimate reason and Article 75 notice. If it relies on misconduct, the file should identify the specific conduct, evidence and applicable Article 80 case rather than repeat the statutory wording.

Where the actual objective is restructuring, cessation of an activity, performance management or a negotiated departure, the record should say so accurately. Re-characterising the decision after a dispute begins generally weakens rather than improves the evidence.

3. Complete the applicable process before issuing the outcome

Process is part of the legal analysis, not merely an administrative step.

For disciplinary action, the Labor Law and work regulations should be considered together with the allegation, investigation, notice, employee response and authorised decision. The Ministry’s current Labor Relations publication addresses written notification of disciplinary penalties and the employee grievance route. The Ministry’s December 2025 awareness guide states, in its summary of Article 80, that the worker must be allowed to present objections before the exceptional termination route is used.

For a performance decision, the record may need to establish the expected standard, communication of that standard, objective evidence, support or opportunity to improve, warnings and consistency in decision-making. Those are practical evidentiary recommendations; their exact application is fact-specific and should not be presented as a universal statutory checklist.

The employer should also test the decision against its approved work regulations and past comparable cases. A reason that appears coherent in isolation may become difficult to defend if the employer’s own procedure or treatment of similar facts points elsewhere.

4. Calculate notice from the selected route

Article 75, as published by the Ministry, distinguishes termination of an indefinite-term contract according to who initiates it and how wages are paid. For a monthly-paid worker, employer-initiated termination requires written notice of at least 60 days; employee-initiated termination requires at least 30 days. Where wages are not paid monthly, the published provision states a minimum of 30 days for the terminating party.

Article 76 provides a payment consequence where the applicable notice period is not observed, unless the parties agree otherwise.

Notice should therefore be a legal calculation, not a template field. The file should record the contract type, initiating party, wage-payment basis, contractual wording, statutory minimum, proposed last working day, any analysis of payment in lieu of notice and the treatment of duties and access during the notice period.

5. Separate notice, compensation and end-of-service entitlement

These amounts answer different questions and should be calculated separately.

The Ministry’s current materials summarise compensation where a termination is unlawful and the contract does not contain specific compensation: Article 77 distinguishes indefinite and fixed terms and sets a two-month wage minimum. The precise application and any contractual compensation clause require case-specific analysis.

Article 84 separately provides the general end-of-service award formula: half a month’s wage for each of the first five years and one month’s wage for each subsequent year, calculated on the last wage, with proportional entitlement for fractions of a year. Other provisions affect entitlement in particular circumstances, including resignation and specified exceptions.

The final calculation should therefore show, as separate lines where applicable:

• salary and accrued contractual amounts;
• unused leave treatment;
• notice or payment in lieu;
• termination compensation;
• end-of-service award;
• incentive, commission or benefit treatment; and
• authorised deductions.

The calculation should identify its wage base, service period and legal or contractual source. A single unexplained “final settlement” figure is difficult to audit and harder to defend.

6. Align the letter, system transaction and final payment

MHRSD describes Qiwa as the principal digital platform for services and transactions between the parties to the Saudi labour system. The system step is not a substitute for legal analysis, but it forms part of the implementation record.

Before submission, the employer should compare:

• the route stated in the approval memorandum;
• the reason and effective date in the termination letter;
• the transaction recorded through Qiwa or the applicable system;
• the payroll and end-of-service calculation; and
• the service certificate and internal HR record.

This comparison is a practical control. Its purpose is to prevent the employer from asserting one route in correspondence and recording another in the system.

7. Close the relationship without creating a second dispute

The Ministry’s awareness guide notes the employer’s obligation on termination to provide a service certificate without charge, containing specified employment information, and to return documents or certificates deposited by the worker.

The close-out plan should also address company property, information security, continuing confidentiality, access revocation, handover, personal-data retention, legally required record preservation and communications to colleagues or customers. Any reliance on post-termination non-compete or confidentiality provisions should be tested against Article 83 and the wording and circumstances of the agreement.

Those matters should be handled proportionately. An unnecessarily accusatory announcement, an overbroad access restriction during notice, or a poorly controlled transfer of the employee’s mailbox can create issues distinct from the original termination decision.

The decision record

Before the authorised decision-maker signs, the file should answer:

1. Which contract governs, and what is its type and documented status?
2. Which legal route is relied upon?
3. Which facts and evidence support that route?
4. Which procedure has been completed, and what opportunity to respond was given where required?
5. What notice, compensation and end-of-service consequences follow?
6. Do the letter, Qiwa transaction, payment and certificate agree?
7. Who is responsible for the final handover, access, data and property steps?

The value of this record is not length. It is consistency. The contract, evidence, law, process, system and payment should describe one decision.

Temairik Law’s employment practice advises employers on Saudi contracts, policies, investigations, performance management, restructuring and termination decisions.

This publication is general information only and does not constitute legal advice. It should not be used to select or implement a termination route without reviewing the current law, regulations, contract, platform record and facts.