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March 24, 2024 - BY Mohamed Abdulaziz

End of Employment Contract in the Saudi System: Rights and Mechanisms

Within the framework of regulating the relationship between workers and employers in the Kingdom of Saudi Arabia, rights and obligations of both parties are stipulated by the legal texts and applicable legislation. Among the laws regulating this relationship is the Saudi Labor Law, which clearly defines the cases in which the employment contract may be terminated.


Article 74 of the Saudi Labor Law specifies these cases precisely, as follows:

1. Mutual Agreement:

In the first clause of the article, the system indicates that the employment contract can be terminated if both parties agree to it, provided that the worker's consent is in writing, reflecting the principle of freedom of agreement between the parties.


2. Expiry of the Specified Term:

In the second scenario, the system points out the termination of the contract upon the expiration of the specified term, unless explicitly renewed according to the provisions of the system, where it may automatically renew in some cases if non-renewal is not declared.


3. Will of One of the Parties:

The contract can also be terminated based on the will of one of the parties in indefinite contracts, as stipulated in Article 75 of the system, reflecting the principle of freedom to withdraw from the employment relationship.


4. Retirement Age:

The article states that the employment contract ends upon the worker reaching the specified retirement age unless the parties agree to continue working after this age, with the possibility of reducing the retirement age in some specified cases.


5. Force Majeure:

The article also allows termination of the contract due to the presence of force majeure that makes the continuation of the employment relationship impossible.


6. Closure of the Establishment and End of Activity:

The contract can also be terminated if the establishment is permanently closed or if the activity in which the worker is engaged ends, unless otherwise agreed upon.


7. Other Cases:

The article concludes by referring to the possibility of terminating the contract in the presence of any other case specified by another system, demonstrating the accumulation of legal protection provided to both the worker and the employer.