Saudi Employment Termination: Calculating Compensation Under Article 77 | SmartLegAI

A source-linked explanation of Saudi Labor Law Article 77 for fixed and indefinite contracts and its two-month minimum.

Saudi Employment Termination: Article 77 Review the contract, its term, the reason and date of termination, and the law in force before calculating compensation for termination without a legitimate reason. Two months' wages is not payable for every year of service under Article 77. It is the minimum total compensation in the statutory cases below when the contract has no specified compensation amount. What Article 77 provides The Saudi Ministry of Human Resources' Labor Law text first looks to a compensation amount specified in the contract for termination by either party without a legitimate reason. If the contract does not specify one, the injured party receives: - For an indefinite contract: fifteen days' wages for each year of the worker's service. - For a fixed-term contract: wages for the remaining contract period. - In either case, no less than two months' wages in total. Check the matter before calculating Identify the contract type and any compensation clause. Review the stated grounds for termination and supporting records, then the wage, service dates, and remaining term where relevant. End-of-service benefits and notice pay are separate issues governed by their own conditions. Research Saudi legal sources and verify the official provision before relying on an automated answer. This is a guide to a statutory rule, not a summary of an unidentified court judgment.

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