Understanding Saudi Labor Law: Resignation After 6 Years

If you are working in Saudi Arabia and considering resigning after six years, it is important to understand the legal requirements and benefits you are entitled to. This article covers key aspects of Saudi Labor Law, including notice periods, end-of-service benefits, and the final settlement process. We will also discuss the importance of reviewing your employment contract and consulting with legal experts.

Notice Period and Penalties

According to the Saudi Labor Law, employees generally need to provide a notice period of 30 days before resigning, unless otherwise specified in their employment contract. Failure to provide proper notice can result in penalties. Therefore, it is crucial to adhere to this requirement to avoid any legal issues.

End-of-Service Benefits

Upon resignation, employees are entitled to end-of-service benefits. These benefits are calculated based on the length of the employee's service in the following manner:

For the first five years of service: You are entitled to half a month's salary for each of the first five years. For each year beyond the first five: You receive a full month's salary for each additional year of service.

For example, if you have worked for six years and your monthly salary is 10,000 Saudi Riyals (SAR), the calculation would look like this:

First 5 years: 5 years × 0.5 × 10,000 SAR 25,000 SAR Last year: 1 year × 1 × 10,000 SAR 10,000 SAR Total End-of-Service Benefits: 25,000 SAR 10,000 SAR 35,000 SAR

This ensures that you receive appropriate compensation for your years of service.

Final Settlement and Repatriation

Employees are also entitled to a final settlement, which includes any outstanding wages, unused vacation days, and other benefits. Your employer is responsible for providing this final settlement upon your resignation. Additionally, if you are a foreign worker, your employer is typically responsible for repatriation to your home country.

Residential Permits and Renewals

In Saudi Arabia, the residential permits (IQAMA) are renewed annually. This means that your employment contracts are also renewed on an annual basis. Companies may offer contracts for terms of 2-3 or 4 years to avoid documentation hassles, but if your IQAMA is not renewed annually, it equates to the termination of your contract.

If you choose to resign after the 6-year mark, it is advisable to inform your line manager or HR about your decision. Ideally, you should time your resignation near the expiry of your IQAMA residence card. This ensures a smooth transition and avoids any unnecessary complications.

Reviewing Employment Contracts and Seeking Legal Advice

The benefits and conditions of your employment are often outlined in your employment contract. It is essential to review these documents carefully, especially when you sign them. Some local companies may not be willing to provide additional end-of-service benefits, and this is generally stated in the contract. Therefore, thorough review and understanding of your contract can help you navigate through these processes effectively.

In case of any doubts or legal issues, it is highly recommended to consult with a legal professional or the labor office in Saudi Arabia. They can offer specific guidance based on your unique circumstances.

By following these guidelines and understanding the legal requirements, you can ensure a smooth and amicable resignation process in Saudi Arabia.