Saudi Labour Law Article 74: how an employment contract ends

What Article 74 says

An employment contract ends in any of these cases:

1. Agreement between the two parties, provided the worker’s consent is in writing.
2. Expiry of a fixed term, unless the contract has been expressly renewed under the law, in which case it runs to its new end.
3. The will of either party on an open-ended contract, following Article 75 (notice for a valid reason).
4. Resignation (added in 2025).
5. Retirement age under the Social Insurance Law, unless the parties agree to continue.
6. Force majeure.
7. Permanent closure of the establishment.
8. Ending the activity the worker is employed in, unless agreed otherwise.
9. A decision or final court judgment ending the worker’s contract in bankruptcy proceedings opened under the Bankruptcy Law (added in 2025).
10. Any other case another law provides for.

What changed in 2025

The amendments added two cases to the list: resignation, and the end of a contract in bankruptcy proceedings. They also defined resignation in Article 2 as the worker’s written statement, made without coercion and without conditions, of a wish to end a fixed-term contract, accepted by the employer. A new Article 79 bis sets the procedure:

• The resignation is treated as accepted if 30 days pass without a reply from the employer.
• The employer may postpone acceptance by up to 60 days when the work requires it, with written reasons given before the 30 days end.
• The worker may withdraw within 7 days, unless the employer has already accepted.
• A resignation may not name a later effective date.
• The contract stays in force while the request is pending, with all obligations on both sides.
• A worker whose contract ends by resignation receives all their rights under the law.

On an open-ended contract, a worker who wants to leave gives notice under Article 75 instead.

Worked example

A worker on a fixed-term contract submits a resignation on 1 March 2026.

• The worker can withdraw it until 8 March, unless the employer accepts first.
• If the employer says nothing, the resignation is accepted and the contract ends on 31 March, 30 days after submission.
• If the employer gives a reasoned written postponement on 20 March, acceptance can be put off by up to 60 days from that date, to 19 May at the latest.

What it means for the final settlement

The route by which the contract ends decides what is owed. Resignation reduces the end-of-service award by length of service under Article 85; dismissal for one of the reasons in Article 80 removes it; leaving under Article 81 keeps all the worker’s rights. Ending a contract without a valid reason can also bring compensation under Article 77.

What HR should do

1. Record the exact route and date the contract ended; it decides the award, notice and compensation.
2. Answer resignations within 30 days, and give any postponement in writing with reasons before that deadline.
3. Get the worker’s consent in writing for any agreed termination.
4. Pay the final settlement within the deadlines in Article 88: one week when the employer ends the contract, two weeks when the worker does.

This page is a general explanation, not legal advice.