Article 77 compensation
Also known as: Article 77 · تعويض المادة 77 · unfair termination compensation
Article 77 compensation is what the harmed party is owed when the other ends the employment contract without a valid reason. If the contract sets no amount, it is 15 days’ wage for each year of service on an open-ended contract, or the wage for the remaining term on a fixed-term contract, and never less than two months’ wage.
Example
Four years of service on an open-ended contract at 8,000 SAR, ended by the employer without a valid reason: 4 × (8,000 ÷ 30 × 15) = 16,000 SAR, which is more than two months’ wage, so it stands. The end-of-service award is paid on top.
What it means for HR
- Document the reason for termination and its evidence; ending without a valid reason triggers this compensation.
- It does not replace the end-of-service award or wages due.
Official sources
This is general information to help you understand the topic. It is not legal advice. Rules and rates change: always check the official text on the relevant authority’s platform and consult a qualified adviser before acting.
