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March 13, 2025 - BY Sultan Al-Qahtani

Key provisions of the contract termination system in the Human Resources Law

1 - Contract termination upon expiration


For non-Saudis, the establishment and the employee are provided with a valid work permit for a minimum of 60 days.

Acceptance of the notice period if the employment contract stipulates a renewal condition.


2 - Based on the unilateral will of one party in contracts of indefinite duration, by Article 75 of the Law.

- Available to the establishment and the Saudi employee with a valid, notarized, indefinite employment contract.

- Compliance with the notice period specified in the employment contract, as stipulated in Article 75 of the Labor Law.


3 - By agreement of both parties, by Article 74 of the Law.

- A valid, notarized employment contract for Saudis and expatriates.

- A valid work permit for a minimum of 60 days for non-Saudis.


4 - Permanent closure of the establishment, by Article 74 of the Law.

Service is available to the establishment if it receives notice of cancellation of the commercial registration or other licenses.

- A valid, notarized employment contract and a valid work permit with a validity period of no less than 60 days for non-Saudis

- Adherence to the notice period specified in employment contracts based on Article 75


5- Establishment of the activity in which the worker works by Article 74 of the Law

- Service availability to the establishment if there is a notice of change in the economic activity in the registry within 60 days

- Existence of a valid, authenticated employment contract

- A work permit valid for a minimum of 60 days for non-Saudis


6- The worker has reached retirement age by Article 74 of the Law

- Service is available to workers and establishments if the worker is 60 years of age or older based on the Hijri calendar

- Existence of a valid, authenticated employment contract

- A work permit valid for a minimum of 60 days for non-Saudis


7- Force Majeure by Article 74

- A valid, authenticated employment contract must be available

- A valid work permit for non-Saudis


8- Transfer of ownership of the establishment to a new owner by Article 18

- The establishment must be a sole proprietorship with notice of change in the registry

- A valid, authenticated employment contract and a valid work permit for non-Saudis


9- Termination of the contract During the probationary period, by Article 53

The service shall be available to the employee and the establishment based on the probationary period specified in the contract. The existence of a valid employment contract.


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