End-of-Service Reward: A Funda...

The end-of-service reward is a fundamental right for employees in the Kingdom of Saudi Arabia, representing a monetary sum granted to an employee upon the termination of their work relationship, whether due to resignation or retirement. This reward forms part of the workers' rights protected by the Saudi Labor System, playing a crucial role in ensuring employees receive fair compensation after years of service.

Article 84 of the Labor System

Under Article 84, the Saudi Labor System regulates the rights of employees to an end-of-service reward. The Saudi law specifies how this reward should be calculated and the conditions for its eligibility, ensuring the protection of workers' rights and maintaining a balance in the employment relationship.

Calculating the Reward

The calculation of the end-of-service reward is as follows:

For service not exceeding five years: The employee is entitled to half a month's salary for each of the first five years.

For service exceeding five years: The employee receives a full month's salary for each year beyond five years.

The reward calculation is based on the employee's last drawn salary.

Resignation and End-of-Service Reward

In case of resignation, the situation slightly changes. If an employee resigns after serving between two and five years, they are entitled to one-third of the reward. For service duration between five and ten years, the worker is entitled to two-thirds of the reward. If the employee's service exceeds ten years, they are entitled to the full reward.

Exceptions and Challenges

However, there are some scenarios where an employee might not be eligible for the end-of-service reward or may only receive a part of it, such as being dismissed for disciplinary reasons.

Conclusion

The end-of-service reward is an integral part of the workers' rights in the Kingdom of Saudi Arabia, reflecting the state's commitment to ensuring a fair and motivating work environment. Workers should be aware of their rights according to the Saudi Labor System, to ensure they receive all their entitlements in full upon the termination of their employment relationship.