Saudi Labor Law Articles 80 and 81 Explained: Employee Resignation Rights and Employer Termination Rules

Explore the protections and responsibilities outlined in Saudi Labor Law for both employers and employees. Learn when employees have the right to resign without notice, the circumstances that justify termination, and how probation rules and end-of-service benefits are applied. A practical guide to fostering fair and lawful workplace practices.

Saudi Arabia’s labor law system, governed by the Ministry of Human Resources and Social Development (MHRSD), outlines a comprehensive legal framework regulating employer-employee relationships across the Kingdom. Articles 80 and 81 are among the most critical provisions, defining the legal grounds for termination and resignation.

These articles help balance organizational needs with employee rights and protections. Given the potential legal and financial consequences of mishandling employment separation, it is crucial for HR professionals and business leaders to understand the precise conditions under which these articles apply and the procedural requirements they entail.

Legal framework overview

The MHRSD serves as the primary authority responsible for regulating labor relations in Saudi Arabia. It administers and enforces the country’s labor law, which applies to all employment relationships, covering both Saudi and foreign workers. This legal framework governs contract formation, working conditions, termination procedures, and employee entitlements. Employers and employees are required to follow legal procedures throughout the employment relationship.

Failing to follow proper procedures, especially during termination or resignation, can trigger legal or financial consequences. As such, understanding the role of the MHRSD and adhering to labor law provisions are essential for maintaining lawful and constructive employment practices.

Article 80: Employer-initiated termination without compensation

Article 80 of the Saudi Labor Law grants employers the right to terminate an employee’s contract without severance pay or end-of-service benefits under specific circumstances. These include serious breaches of duty, such as unauthorized absences totaling 15 consecutive days or 30 intermittent days within a single year. Other valid grounds include workplace misconduct, dishonesty, physical assault against colleagues or supervisors, and the abuse of one’s position for personal gain.

However, employers must support such claims with clear documentation and credible evidence—such as warnings, attendance logs, or investigation reports—to justify the dismissal.

Article 80 cannot be applied retroactively to behavior that was previously tolerated or unaddressed. Employers must give the employee a chance to respond to allegations and provide clear evidence —such as warnings or attendance logs—before invoking Article 80.

If an employer invokes this article without meeting its strict conditions, the action may be deemed unlawful, potentially resulting in financial penalties or an order to reinstate the employee. Therefore, employers must strictly follow due process when terminating employment under this provision.

Article 81: Employee right to resign without notice

Article 81 of the Saudi Labor Law allows employees to resign immediately—without serving a notice period—if the employer violates specific contractual or legal obligations. Valid grounds for such resignation include being hired under false pretenses, experiencing consistent non-payment of wages, facing abuse or assault by the employer, enduring unsafe working conditions, or being reassigned to fundamentally different work without consent, in violation of Article 60.

Article 81 also applies when the employer’s conduct effectively forces the employee to resign, even if it seems voluntary.

To resign under Article 81 without penalty, the employee must provide evidence of the employer’s breach. This can include, among others:

• Written complaints;
• Wage statements showing non-payment;
• Witness testimonies; or
• Medical reports documenting harm.

If the employee proves their claim, they receive end-of-service benefits in full, as the law recognizes the employer’s misconduct as the cause of separation. This gives employees a lawful way to leave harmful or exploitative work environments.

Probation period clauses

In Saudi Arabia, the probation period typically lasts between three to six months, as defined by the terms of the employment contract. During this time, both the employer and the employee have the right to terminate the contract without owing severance pay or end-of-service benefits. However, unless the contract explicitly waives the requirement, either party must provide advance notice before terminating the contract.

While the probation period offers flexibility, it does not exempt employers from basic labor protections. If an employee is dismissed during probation without a valid reason, or if the termination process violates procedural fairness, the employee may still seek legal recourse through labor courts.

Similarly, if an employee resigns without notice and no waiver clause exists, the employer may claim compensation for damages or losses incurred due to the abrupt departure. Therefore, clear contract terms and legal compliance remain crucial during probation.

Financial implications of resignation

Saudi Labor Law sets clear rules regarding an employee’s eligibility for end-of-service benefits when resigning. The amount an employee receives depends on service length and the reason for resignation. Employees who resign after two to five years of service are entitled to one-third of their end-of-service award, while those who have worked for five to ten years may receive two-thirds. Full benefits apply to employees who have served for over ten years, if the resignation meets legal criteria.

However, if the resignation does not meet the legal requirements—such as failing to comply with notice terms or lacking valid cause under Article 81—the employee may forfeit some or all of their entitlements. Conversely, if the resignation meets Article 81 conditions and is supported by evidence, employees retain full benefits regardless of tenure.

As a result, both the timing and legal justification for resignation play a crucial role in determining financial outcomes.

Employer responsibilities and legal procedures

Whether an employment relationship ends through employer-initiated termination or employee resignation, Saudi Labor Law imposes clear procedural responsibilities on the employer.

Employers must provide written notice or a valid justification for termination, particularly when invoking Article 80. In all cases, they are required to promptly settle final payments, including any outstanding wages, unused leave entitlements, and applicable end-of-service benefits.

Additionally, upon request, employers must issue an experience certificate detailing the employee’s service duration and role. Failure to fulfill these obligations may result in administrative penalties, such as fines or sanctions imposed by the MHRSD. In more serious cases, affected employees may pursue civil claims to recover unpaid dues or seek compensation for damages.

Adhering to these procedures not only ensures legal compliance but also promotes a respectful, well-regulated workplace culture.

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