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If you resign from your job during contract period in Saudi Arabia, follow this to avoid the rejection of your resignation by the employer. We have explained the resignation rules as per Saudi Labor Law below.
Types of Contract
There are two kinds of contracts as per Saudi Labor Law and the resignation rules largely differ depending upon the type of the contract.
- Fixed-Term Contract.
- Indefinite Contract.
Every employee be it it a Saudi or an expat signs a fixed-term contract in the beginning with his employer in Saudi Arabia.
A contract with a Saudi employee becomes an indefinite contract after some time period.
However, a contract with a Non-Saudi employee will always remain a fixed-term contract as per Article 37 of Saudi Labor Law.
- Expatriate Employees = Fixed Term Contract.
- Saudi Employees = Fixed-term or indefinite contract.
Resignation – Fixed Term Contract
At the end of the contract
But what is the expiry of your contract? Normally, the expiry date is written explicitly in the contract but upon renewal, people get confused which date to consider as the completion date.
If there is a renewal clause with a specified period in the fixed-term contract, the contract will be renewed for the time period mentioned in the contract as per Article 55 (2) of Saudi Labor Law.
If there is no renewal clause in the fixed-term contract or the time period is not specified,
- Non-Saudis: The contract will be renewed to the date of the Iqama expiry for an expat employee as per Article 37 of Saudi Labor Law.
- Saudis: If the employer does not terminate a Saudi employee, the contract will be renewed and become an indefinite contract.
During the contract period
If you want to resign during a fixed-term contract period before its completion in Saudi Arabia, make sure that your employer fully agrees to that. The employer has the right to reject your resignation in Saudi Arabia or ask for compensation under Article 77 of Saudi Labor Law.
Therefore, if your employer rejects your resignation in Saudi Arabia, it is better to weigh the compensation you might have to pay with the salary increment you are getting by changing the job.
Resignation – Indefinite Contract
An employee can resign from job with an indefinite contract with a 60-day notice period under Article 75 of Saudi Labor Law.
If an employee resigns under an indefinite contract, the employer has the right to ask for penalty compensation under Article 77 of Saudi Labor Law.
It is important to reiterate that Non-Saudi employees cannot have an indefinite contract as per Article 37 of Saudi Labor Law.
Definition of Indefinite Contract
For Saudi employees, a fixed-term contract becomes an indefinite contract under the following 2 conditions;
- If there is no renewal clause in the fixed-term contract and the employer does not terminate the employee at the contract completion, it will become an indefinite contract in Saudi Arabia.
- A fixed-term contract becomes an indefinite contract after 3 consecutive renewals, or after 4 years of service as per article 55 (2) of Saudi Labor Law.
Source: Saudi Labor Law