Common Reasons for Job Termination in Saudi Arabia (KSA)

Losing a job can be stressful, especially in a foreign country like Saudi Arabia. Whether you're an expat or a Saudi national, it's important to understand the common reasons for job termination in the Kingdom of Saudi Arabia (KSA) and your legal rights under the Saudi Labor Law.

This guide explains the lawful and unlawful grounds for dismissal, employer obligations, and what you can do if you're terminated unfairly.

📌 What Does Saudi Labor Law Say About Termination?

Saudi Labor Law, particularly Articles 74–80, outlines various acceptable reasons for contract termination. It classifies dismissals into:

Valid/legal reasons (with or without notice)
Invalid/unlawful terminations (which can be challenged)
Mutual or automatic terminations (e.g. end of contract)

Let’s go through each category step by step.

✅ 1. End of Contract (Article 74)

The most common reason for termination is the natural end of a fixed-term contract. This includes:

Contract expiry and no renewal by either party.
Completion of a specific project or task.
Retirement age reached (typically 60 years unless otherwise agreed).

👉 In these cases, no legal dispute arises as long as proper notice and dues (including End of Service Benefits) are paid.

✅ 2. Mutual Agreement to Terminate

Both the employer and employee may agree in writing to end the contract at any time. This is allowed under Article 74 as long as both sides consent and finalize documentation properly.

❌ 3. Termination Without Cause (Article 77)

An employer may terminate an employee without providing a reason, but they must:

Pay the End of Service Benefits (ESB), and
Compensate the employee for early contract termination, equal to:
- Remaining contract value, or
- Two months' salary (whichever is higher)

👉 Many expats are unaware that Article 77 protects them financially even if they’re terminated without justification.

❌ 4. Termination Due to Redundancy or Restructuring

In rare cases, companies may reduce staff due to:

Business closure
Department shutdown
Financial losses
Mergers or acquisitions

While this may seem valid, employers are still obligated to justify the decision and pay all legal dues. Unfair targeting or discrimination during layoffs can be challenged in labor courts.

⚠️ 5. Termination During Probation

During the probation period, either party may terminate the contract without compensation, provided it's:

Clearly stated in the contract
Not based on discrimination, harassment, or illegal grounds

Note: Probation usually lasts up to 90 days, extendable once by mutual agreement.

❗ 6. Termination for Just Cause (Article 80)

This article allows immediate dismissal without compensation or ESB if the employee:

Commits theft or dishonesty
Assaults the employer or coworkers
Is absent 15+ consecutive days or 30 days non-consecutively
Violates safety procedures repeatedly
Discloses company secrets
Forges documents to get the job

⚠️ Caution: Employers must provide proof. Termination under Article 80 can be legally challenged if mishandled.

❌ 7. Poor Performance or Incompetence

An employee can be terminated for underperformance if:

They receive repeated written warnings
Are offered training or a chance to improve
Still fail to meet job expectations

👉 Random dismissal for “not performing well” without documentation is unlawful.

❌ 8. Frequent Absenteeism or Tardiness

Unjustified frequent absences or lateness are grounds for disciplinary action. After formal warnings, employers may proceed to termination.

However, emergency sick leaves with medical proof are protected by law.

❌ 9. Misuse of Company Resources

Examples include:

Using company car for personal purposes
Downloading pirated software
Accessing inappropriate websites at work

Repeated violations may lead to lawful dismissal.

❌ 10. Violation of Work Ethics or Company Policies

This includes:

Harassment or bullying
Discrimination
Alcohol or drug use
Insubordination

HR departments must follow a gradual disciplinary process unless the violation is serious.

❓ What to Do If You Are Terminated

If you believe your termination was unfair, take the following steps:

✅ Step 1: Request Written Reason

Ask your employer for a formal reason in writing.

✅ Step 2: Calculate Dues

Use the MHRSD End-of-Service calculator to estimate what you're owed.

✅ Step 3: File a Complaint

Submit a complaint through the Ministry of Human Resources:

MHRSD Website
Or call 19911 (24/7 support in Arabic & English)

🧑‍⚖️ Employee Rights After Termination

You are legally entitled to:

Full salary until your last working day
End-of-Service Benefits (ESB)
Payment for unused vacation days
Experience certificate

If you worked for 2+ years, you’re also entitled to a notice period or payment in lieu.

🤔 Can You Be Terminated While on Iqama Transfer?

If your Iqama is being transferred, your current employer cannot terminate you without legal basis. Labor courts protect expats from “exit strategy” abuse during sponsorship transfer.

🔚 Conclusion

Job termination is a serious issue—understanding your rights and the reasons behind it can protect you from unfair practices. While employers have the right to dismiss employees under certain conditions, Saudi Labor Law provides strong protections for both Saudis and expats.

If you’ve been terminated unfairly, don’t stay silent. You can file a legal claim and get justice—the system is there to help.

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