The Labor Law in the Kingdom of Saudi Arabia is keen to strike a balance between the interests of the employer and those of the employee. Among the most important matters that concern employees is the question of terminating the employment contract, and specifically what is known as wrongful (arbitrary) dismissal. Many employees are unaware that they have clear rights when their employment relationship is terminated unlawfully, and that the law has provided them with means to claim those rights.

In this article, we clarify when dismissal is arbitrary, the dues arising from it, and how to resort to the competent judicial authority to claim them.

When Is Dismissal Arbitrary?

Wrongful dismissal, generally, is the employer's termination of the employee's contract without a legitimate reason or without following the correct statutory procedures. Among the situations that may fall within this scope are:

  • Terminating the contract for a reason unrelated to the employee's performance or professional conduct.
  • Dismissal because the employee claimed their legitimate statutory rights.
  • Terminating an indefinite-term contract without an acceptable statutory justification.
  • Failing to grant the employee the opportunity or procedures guaranteed by the law before termination.
Practical tip: Always keep a copy of the employment contract, correspondence, termination notices, and pay slips. These documents form the basis for proving your right in any claim, and their absence may weaken your position even if the right is on your side.

The Employee's Dues in Cases of Wrongful Dismissal

When it is established that the dismissal occurred in an arbitrary manner, the law guarantees the employee a set of rights, the most notable of which, generally, are:

  • The wages due for the actual period of work that have not yet been paid.
  • The allowance for accrued leave that the employee has not taken.
  • The compensation prescribed for unlawful termination in accordance with what the law provides or what the two parties have agreed upon.
  • Any other amounts stipulated by the contract or the establishment's work organization regulation.

End-of-Service Award

The end-of-service award is one of the employee's fundamental rights upon the termination of the employment relationship, and it is calculated based on the length of service and the final wage in accordance with the rules prescribed in the law. It is a right independent of the compensation for wrongful dismissal, meaning that the employee's receipt of the award does not prevent them from claiming compensation if it is established that the termination was arbitrary, and vice versa.

Resorting to the Labor Court

If the employee and the employer do not reach an amicable settlement, the statutory route is to file a lawsuit before the competent labor judicial authority. This is often preceded by an amicable settlement stage that allows the two parties to reach a solution before litigation. At this stage, the presence of a legal consultant is important for drafting the claim accurately, organizing the documents, and assessing the dues correctly.

  • Define your claims clearly and support them with the documents available to you.
  • Adhere to the statutory deadlines for the claim so that your right is not forfeited over time.
  • Seek the help of a legal expert to assess the strength of your position before entering into litigation.
This article is general information for legal awareness and does not constitute legal advice or an opinion on a specific matter. The outcome varies according to the circumstances of each case, the documents, and the regulations in force at the time the dispute is considered. To assess your situation accurately and know your dues, we recommend booking a consultation with our legal team.

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