When an employer ends an employment contract without lawful cause, the employee's rights go well beyond the last month's salary. The law orders a package of entitlements, sets an explicit deadline for paying them, and provides a clear dispute path. Everything below follows the Labor Law issued by Royal Decree M/51, as amended by Royal Decree M/44 of 1446H, effective 19 February 2025.
The entitlement checklist, in order
When the relationship ends through an unlawful employer termination, review these items one by one:
- Unpaid wages — any salaries or amounts still owed.
- Notice period or pay in lieu — depending on what was actually given.
- End-of-service benefit — under the Article 84 rule; it can be computed with the end-of-service calculator.
- Pay for unused leave.
- Compensation for unlawful termination under Article 77.
- A service certificate.
- The final settlement of dues.
A key point: Article 77 compensation does not cancel the other claims — unpaid wages, leave pay, and the end-of-service benefit remain payable where due.
Compensation for unlawful termination — Article 77
Where the contract does not specify compensation for unlawful termination, Article 77 sets the following rule:
| Contract type | Compensation | Minimum | | --- | --- | --- | | Indefinite term | 15 days' wage per year of service | Two months' wage | | Fixed term | Wages for the remaining contract term | Two months' wage |
Simple worked example: an employee on an indefinite-term contract, actual wage 10,000 riyals per month, with 6 full years of service. Article 77 compensation is 15 days per year: 15 days x 6 years = 90 days, i.e. 3 months' wage = 30,000 riyals. This amount is separate from the end-of-service benefit and the other items above.
Notice period or pay in lieu
In an indefinite-term contract where the wage is paid monthly, the notice period is 60 days when the employer terminates and 30 days when the worker does. If the wage is not monthly, the period is 30 days for either party. A party that does not observe the notice period pays the other an amount equal to the worker's wage for the notice period or its remainder, unless a longer period was agreed. Notice pay should not be confused with Article 77 compensation: a worker may be owed notice pay alone, or both, depending on the ground for termination and how it was carried out.
The settlement deadline — Article 88
| Who ended the relationship | Settlement deadline | | --- | --- | | The employer | Within one week of the end of the relationship | | The worker | Within no more than two weeks |
The deadline covers the full settlement of the worker's dues, and unjustified delay falls within what the dispute-settlement bodies examine.
What if the employer cites Article 80?
Article 80 is the gateway to grave-cause dismissal without an award, notice, or compensation, in defined cases such as assault, material breach of obligations, violating safety instructions after a warning, or absence under the statutory conditions. Writing "dismissed under Article 80" is not enough: the facts must be proven and the ground must actually apply, and the worker must be given the chance to object. Where the facts are disputed, the Labor Court examines whether the ground applies.
The dispute path
A labor dispute usually starts with amicable settlement at the Ministry of Human Resources and Social Development, a first stage aimed at reconciling the parties. If no settlement is reached, the claim is referred to the Labor Court within 21 working days of the first session. The statement of claim is filed via Najiz through the judicial services, classifying the claim, entering the parties' details and requests, and attaching documents: the employment contract, payroll records, bank statements, and Qiwa notices. For more labor topics, see the labor section.
When do you need a licensed lawyer?
This page is general information, not an opinion on any specific case. The matter becomes case-specific — warranting review by a licensed lawyer — when the ground for termination is unclear or contested, when Article 80 is invoked and the facts and their proof are disputed, when the contract contains bespoke compensation clauses, or when the claim intersects with other issues such as work-permit status or the terms of a non-Saudi worker's contract. In those situations the assessment turns on the case's own documents, and the final word rests with the competent court.