Employment Contract Termination Template
The Legal Way to Avoid Labor Disputes
What is an Employment Contract Termination Template ?
An employment contract termination model, particularly for fixed-term contracts, is one of the essential documents that Human Resources departments in companies must maintain. This model is used to document the legality of the contract's termination, ensure the employee has fully received their financial entitlements, and protect the company from any future legal claims by clearly including final settlement and release clauses.
Most Prominent Cases for Terminating Employment Contracts According to the Saudi Labor Law
The cases for terminating employment contracts vary depending on the reasons for termination.
The Saudi Labor Law
(Articles 74, 75, and 53) has specified the legitimate cases as follows:
1. Termination of the employment contract during the probationary period: According to Article (53) of the Labor Law, either party may terminate the employment contract during the probationary period without prior notice.
2. Expiration of a fixed-term employment contract: Either party may notify the other of their desire to terminate the contract in accordance with the period agreed upon in the contract. If the relationship continues after the original term expires, the contract is considered renewed for a similar term.
3. Termination of an indefinite-term employment contract: Either party to the contract has the right to end the contractual relationship with a prior notice of 30 days if the termination is by the employee, and 60 days if it is by the employer.
4. Resignation: The employee has the right to submit their resignation in fixed-term contracts. The employer must respond to the resignation request within 30 days; otherwise, the resignation is considered accepted.
There are less common but legitimate reasons such as: the permanent closure of the establishment, force majeure, the employee reaching retirement age, cessation of the business activity, or a judicial ruling of bankruptcy.
1. Termination of the employment contract during the probationary period: According to Article (53) of the Labor Law, either party may terminate the employment contract during the probationary period without prior notice.
2. Expiration of a fixed-term employment contract: Either party may notify the other of their desire to terminate the contract in accordance with the period agreed upon in the contract. If the relationship continues after the original term expires, the contract is considered renewed for a similar term.
3. Termination of an indefinite-term employment contract: Either party to the contract has the right to end the contractual relationship with a prior notice of 30 days if the termination is by the employee, and 60 days if it is by the employer.
4. Resignation: The employee has the right to submit their resignation in fixed-term contracts. The employer must respond to the resignation request within 30 days; otherwise, the resignation is considered accepted.
There are less common but legitimate reasons such as: the permanent closure of the establishment, force majeure, the employee reaching retirement age, cessation of the business activity, or a judicial ruling of bankruptcy.
The Most Commonly Used Model for Terminating Employment Contracts
The model for terminating an employment contract by mutual agreement is considered one of the most frequently used models, as it ensures a clear agreement between the two parties on the details of the termination and protects against future disputes.
Below is a simplified model of an agreement for terminating an employment contract by mutual consent:
End-of-Service Final Settlement Model
Another important model is the "End-of-Service Final Settlement and Discharge of Liability," which is drafted as follows:
Conclusion
The reasons and models for terminating employment contracts vary according to Saudi law. Yaqeen Al Ferasah Law Firm and Legal Consultations offers distinguished services for drafting Human Resources management models in a way that preserves the rights of companies and employees and reduces legal disputes. For more information, please visit our
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