Article 74 is the gateway to every termination question. It enumerates the grounds on which a contract ends, and no other ground works. Before asking what an employee is owed, establish which paragraph applies, because the answer changes with it.
Royal Decree M/44 of 1446H added two paragraphs: resignation as a standalone ground, and a final court ruling terminating the contract within bankruptcy proceedings.
The text of the article
An employment contract shall end in any of the following cases:
- 1If both parties agree to end it, provided the worker's consent is in writing.
- 2If the term specified in the contract expires, unless the contract has been expressly renewed under this Law, in which case it continues to its new term.
- 3At the will of either party in contracts of indefinite term, in accordance with Article 75.
- 4Resignation (paragraph 3-bis, added by Royal Decree M/44).
- 5The worker reaching retirement age as determined by the Social Insurance Law, unless the parties agree to continue working beyond that age.
- 6Force majeure.
- 7Permanent closure of the establishment.
- 8Discontinuation of the activity in which the worker is engaged, unless otherwise agreed.
- 9A final decision or judgment from the competent court terminating the worker's contract in bankruptcy proceedings opened under the Bankruptcy Law (paragraph 7-bis, added by Royal Decree M/44).
- 10Any other case provided for in another law.
Status of the text: Amended by Royal Decree M/46 dated 5/6/1436H; paragraph 4 further amended by Royal Decree M/134 dated 27/11/1440H; paragraphs 3-bis and 7-bis added by Royal Decree M/44 dated 8/2/1446H, effective 20/8/1446H.
The Arabic text published by the Bureau of Experts at the Council of Ministers is the reference; the English above is a working translation.
What the article means in practice
The ground decides the entitlements
Employers often start with "how much do we pay" before settling "how did this contract end". Termination by mutual agreement, expiry of term or retirement leaves end-of-service pay intact; resignation follows the sliding scale in Article 85; dismissal under Article 80 removes it entirely.
Record the ground by its paragraph, not by a loose description. "Left the job" is not a legal ground; "written mutual agreement" or "expiry of a fixed term" is.
Written consent is a condition, not a formality
Paragraph 1 requires the worker's consent in writing. An undocumented amicable exit is read at trial as an employer-initiated termination, which brings Article 77 compensation into play.
Retirement age now follows social insurance rules
The pre-2019 text fixed 60 years for men and 55 for women. The current text defers to the Social Insurance Law, so any internal policy still quoting the old ages needs updating.
Before recording a termination
- 1Identify the applicable paragraph of Article 74 and record it as the reason.
- 2Obtain the worker's signed written consent where the exit is by agreement.
- 3Compute end-of-service pay on that basis: full, resignation scale, or forfeited under Article 80.
- 4Settle all dues within one week if the employer terminated, two weeks if the worker did (Article 88).
- 5Close the GOSI registration and complete the exit steps on Qiwa.
Mistakes that recur in practice
Amicable exit with no paperwork
Paragraph 1 requires written consent; a verbal deal reads as employer termination and triggers Article 77.
Confusing expiry with tacit renewal
A fixed-term contract the worker continues to serve under is renewed, so it cannot later be ended by claiming the term lapsed.
Relying on a fixed retirement age
The operative text points to the Social Insurance Law, not to a number written in the article.
How Barez applies this article
Reason is a required field
Ending service in Barez asks for the ground first, and end-of-service pay is computed from it rather than typed in.
The settlement is assembled for you
Once the ground is set, the system builds the settlement: gratuity, untaken leave under Article 111, dues and debts.
The end date stops the clock
Attendance and violations stop accruing on the last day, so no phantom absences appear after the exit.
Sources
- Saudi Labour Law, Bureau of Experts at the Council of Ministers
- Ministry of Human Resources and Social Development
This page is explanatory guidance, not legal advice. In a dispute, rely on the official text and consult the Ministry of Human Resources and Social Development or a licensed lawyer.