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Termination of the contract

Article 77 of the Saudi Labour Law:compensation for unlawful termination

Article 77 sets a fixed formula for compensation: fifteen days' wage per year of service on an indefinite contract, or the wage for the remaining term on a fixed one, and never less than two months' wage.

  • Article 77
  • Explanatory guidance

Article 77

Frequently asked questions

How much is compensation for unfair dismissal in Saudi Arabia?

Fifteen days' wage for each year of service on an indefinite contract, or the wage for the remaining term on a fixed-term contract. In both cases it is never less than two months' wage, unless the contract sets its own compensation for termination.

Does it stack with end-of-service gratuity?

Yes. Gratuity is owed for length of service under Article 84. Article 77 compensation is owed because the contract was ended without a lawful ground. One does not replace the other.

Who decides that a termination was unlawful?

The labour court, if the case is disputed. Employers protect themselves by keeping records: the ground in writing, written warnings where the law requires them, and a record that the employee was given a chance to respond before the decision.

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