When Can You Be Fired in Saudi Arabia Without Compensation?

Saudi Labor Law provides specific circumstances under which an employer can terminate an employee without notice or end-of-service benefits (essentially, without paying any money). These situations are narrowly defined and primarily relate to the probation period or instances of gross misconduct. Outside these scenarios, termination usually requires notice and often triggers end-of-service benefits. Let's delve into the details.

Probation Period: Termination Without Liability

During the probation period, which can last up to 180 days, employers have the right to terminate an employee without providing notice or compensation. This right is reciprocal, meaning the employee also has the freedom to end the contract without incurring any liability, provided the terms are clearly outlined in the employment contract. As noted, the probation period is now variable per contract, a change from the previously standardized 90 days (example.com). However, any misuse of the probation period could lead to legal challenges for the employer.

Gross Misconduct: Grounds for Immediate Dismissal

Saudi Labor Law allows for termination without notice in cases of gross misconduct. However, this is only permissible for serious violations explicitly listed in the law. Examples include:

Physical assault in the workplace.
Breach of confidentiality or disclosure of sensitive company information.
Continued underperformance despite receiving written warnings.
Misconduct that violates professional standards.
Deliberate damage to company property.
Forgery of documents or certificates.
Exploiting the job for personal gain.
Inadequate performance during the probation period.

In these instances, neither notice nor end-of-service benefits are required, provided the employer has properly documented the misconduct (example.com).

Other Lawful Terminations

Besides probation and gross misconduct, other lawful terminations might occur. These include:

Contract expiry: When the employment contract reaches its natural end.
Mutual agreement: When both the employer and employee agree to terminate the contract.

In these cases, while there may not be extra compensation, prorated end-of-service benefits might still apply depending on the length of service and contract terms.

The Risks of Unlawful Termination

Terminating an employee without a valid reason, without providing proper notice (when required), or engaging in discrimination or retaliation can lead to significant legal consequences for the employer. In such cases, Article 77 of the Saudi Labor Law comes into play, potentially requiring the employer to pay compensation, reinstate the employee, or provide other benefits. End-of-service benefits are generally mandatory unless specifically exempted (e.g., during probation or in cases of gross misconduct) (example.com).

Key Takeaways

Probation Period: No notice or end-of-service benefits; equal rights for both parties to terminate.
Gross Misconduct: No notice or end-of-service benefits; requires specific, documented violations.
Contract Expiry/Mutual Agreement: Typically no extra compensation; prorated benefits may apply.
Standard Termination: Requires notice and end-of-service benefits based on wage and service length.

Recent Developments

Recent updates to Saudi Labor Law emphasize the Qiwa unified contract, which allows for flexible probation periods of up to 180 days. This provides employers with more discretion during the initial employment phase. Resignations must now be submitted via the Qiwa portal to be considered valid (example.com). As of 2026, Article 77 and the provisions regarding gross misconduct remain in effect, underscoring their continued importance.

Disclaimer

This information is for general guidance only and does not constitute legal advice. It is essential to consult with legal professionals to understand how Saudi Labor Law applies to specific situations. Always refer to the latest version of the law and your individual employment contract for accurate and up-to-date information.

Blog

Firing Without Compensation: A Guide to Saudi Labor Law