1
Labor Law - Article 77
"compensation equal to the wages for the remaining period of the contract, if the contract is for a fixed term"
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What does an employer owe if it ends a fixed-term contract early?
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early termination fixed-term compensation
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If the employer ends the contract early without a valid reason, the employee is owed compensation for the remaining term[1]Labor Law · Article 77. The notice periods in Article 75 apply to indefinite contracts, not fixed-term ones[2]Labor Law · Article 75.
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Labor Law - Article 75
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Chapter 5: Termination of Employment - Article 77
Labor Law / Chapter 5: Termination of Employment / Article 77
ActiveBOEM/5127 Sep 200523 Shaaban 1426 AHEN
Unless the contract specifies compensation for its termination by either party for an invalid reason, the other party is entitled to compensation equal to the wages for the remaining period of the contract if the contract is for a fixed term.
What notice does Article 5 require?
What notice does Article 5 require?
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Article 5.1 requires sixty days' written notice from either Party.
Does that comply with the Labor Law?
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Yes. Sixty days meets the statutory minimum for employees paid monthly.
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ViewsEmployment Agreement
This Employment Agreement (the "Agreement") is entered into on 1 Muharram 1447H, corresponding to 26 June 2025G (the "Effective Date").
BETWEEN
(1) Najd Logistics Company, a limited liability company formed under the laws of the Kingdom of Saudi Arabia, commercial registration number 1010847321, with its principal place of business in Riyadh (the "Employer"); and
(2) the individual named in Schedule A (the "Employee").
(together, the "Parties", and each a "Party").
Recitals
The Employer wishes to engage the Employee, and the Employee wishes to serve the Employer, on the terms of this Agreement.
The Parties agree as follows.
Article 1. Interpretation
1.1 In this Agreement, unless the context requires otherwise, "Labor Law" means the Saudi Labor Law issued by Royal Decree No. M/51 dated 23/8/1426H, as amended, and a "Month" means a Gregorian calendar month.
Article 2. Commencement and term
2.1 This Agreement is of indefinite term and takes effect on the date set out in Schedule A.
2.2 The first ninety (90) days are a probation period. Either Party may terminate during probation in accordance with Article 53 of the Labor Law.
Article 3. Duties and place of work
3.1 The Employee is engaged as Operations Manager and reports to the Chief Operating Officer.
3.2 The principal place of work is the Employer's offices in Riyadh, without prejudice to reasonable travel that the role requires.
Article 4. Remuneration
4.1 The Employee's basic monthly wage is SAR 18,000 (eighteen thousand Saudi Riyals), payable on the last working day of each Month.
4.2 Housing and transport allowances are as set out in Schedule A.
Article 5. Termination
5.1 Either Party may terminate this Agreement by giving the other sixty (60) days' written notice.
5.2 Nothing in this Article limits a Party's right to terminate for a valid reason under the Labor Law.
Article 6. Confidentiality
6.1 The Employee shall keep the Employer's confidential information secret during employment and after it ends, and shall use it only to perform this Agreement.
Article 7. Governing law
7.1 This Agreement is governed by the laws of the Kingdom of Saudi Arabia. The labor courts in Riyadh have exclusive jurisdiction over any dispute arising out of it.
In witness whereof the Parties have executed this Agreement on the date first written above.
For the Employer
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Title
Date
For the Employee
Name
Title
Date
Align the notice clause with Article 75 for monthly-paid employees.
Align the notice clause with Article 75 for monthly-paid employees.
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I proposed a tracked change on Article 5.1 so the notice matches Article 75 for monthly-paid employees.
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ViewsEmployment Agreement
This Employment Agreement (the "Agreement") is entered into on 1 Muharram 1447H, corresponding to 26 June 2025G (the "Effective Date").
BETWEEN
(1) Najd Logistics Company, a limited liability company formed under the laws of the Kingdom of Saudi Arabia, commercial registration number 1010847321, with its principal place of business in Riyadh (the "Employer"); and
(2) the individual named in Schedule A (the "Employee").
(together, the "Parties", and each a "Party").
Recitals
The Employer wishes to engage the Employee, and the Employee wishes to serve the Employer, on the terms of this Agreement.
The Parties agree as follows.
Article 1. Interpretation
1.1 In this Agreement, unless the context requires otherwise, "Labor Law" means the Saudi Labor Law issued by Royal Decree No. M/51 dated 23/8/1426H, as amended, and a "Month" means a Gregorian calendar month.
Article 2. Commencement and term
2.1 This Agreement is of indefinite term and takes effect on the date set out in Schedule A.
2.2 The first ninety (90) days are a probation period. Either Party may terminate during probation in accordance with Article 53 of the Labor Law.
Article 3. Duties and place of work
3.1 The Employee is engaged as Operations Manager and reports to the Chief Operating Officer.
3.2 The principal place of work is the Employer's offices in Riyadh, without prejudice to reasonable travel that the role requires.
Article 4. Remuneration
4.1 The Employee's basic monthly wage is SAR 18,000 (eighteen thousand Saudi Riyals), payable on the last working day of each Month.
4.2 Housing and transport allowances are as set out in Schedule A.
Article 5. Termination
5.1 Either Party may terminate this Agreement by giving the other written notice of at least sixty (60) days if the Employee is paid monthly.
5.2 Nothing in this Article limits a Party's right to terminate for a valid reason under the Labor Law.
Article 6. Confidentiality
6.1 The Employee shall keep the Employer's confidential information secret during employment and after it ends, and shall use it only to perform this Agreement.
Article 7. Governing law
7.1 This Agreement is governed by the laws of the Kingdom of Saudi Arabia. The labor courts in Riyadh have exclusive jurisdiction over any dispute arising out of it.
In witness whereof the Parties have executed this Agreement on the date first written above.
For the Employer
Name
Title
Date
For the Employee
Name
Title
Date
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