Resignation is a significant step in any employee’s career, marking the end of one professional chapter and the beginning of another. In Saudi Arabia, the Labor Law sets clear rules to ensure fairness for both employees and employers when a resignation occurs. Employees working in the private sector are entitled to several rights that guarantee financial stability, recognition of their service, and a smooth transition to their next opportunity.
This article explains in detail the rights of employees after resignation under Saudi labor regulations, including end-of-service benefits, settlement of dues, service certificates, leave balance compensation, and social insurance entitlements.
1. End-of-Service Benefits (EOSB)
End-of-service benefits are among the most important rights for employees leaving their jobs. Article 84 of the Saudi Labor Law states that upon termination of the employment relationship, the employer must pay the employee a reward for the years of service.
The calculation works as follows:
- Half-month salary for each year of service during the first five years.
- One-month salary for each year of service after the first five years.
- Partial years are calculated proportionally.
Article 85 clarifies how EOSB changes with resignation:
- If service is 2–5 years, the employee receives one-third of the reward.
- If service is 5–10 years, the employee receives two-thirds.
- If service is 10+ years, the employee receives the full EOSB.
Additionally, Article 87 grants employees full EOSB if the resignation is due to force majeure, and grants female employees full entitlement if they resign within 6 months of marriage or 3 months of childbirth.
2. Settlement of Dues
Article 88 of the Saudi Labor Law obliges the employer to settle all dues and pay outstanding wages within two weeks of the employee’s resignation. This ensures the departing worker has no delays in receiving their financial rights. Employers may deduct debts owed by the employee, but only those directly related to work.
3. Service Certificate
Upon resignation, employees have the right to a service certificate free of charge. This certificate should include the start date, end date, job title, and final wage. Employers are not allowed to include negative remarks that could harm the employee’s future job prospects.
Article 64 further requires employers to return all personal documents or certificates that the employee had submitted at the time of hiring.
4. Compensation for Unused Leave
According to Article 111, employees are entitled to monetary compensation for any unused annual leave when they resign. The payment is calculated based on the employee’s last wage and covers both full unused leave and partial entitlement for the period worked in the final year.
Formula:
Monthly Salary ÷ 30 × Number of unused leave days
5. Social Insurance Entitlements
Resignation does not cancel the employee’s right to social insurance benefits. Entitlements vary depending on the length of subscription and circumstances:
- Lump sum payment if the employee resigns and moves to a job under the civil or military pension system.
- Lump sum payment if subscription is less than one year.
- Early retirement pension if the employee completes 300 months (25 years) of contribution.
- Non-Saudis leaving the Kingdom may withdraw their contributions in full.
6. Rights in Fixed-Term vs. Indefinite Contracts
If an employee on a fixed-term contract chooses not to renew after expiry, they are still entitled to EOSB, leave balance compensation, and other benefits. The main difference is the timing of settlement:
- Article 88 requires settlement within one week after contract expiry in such cases.
7. Notice Period
Article 75 allows employees with indefinite contracts to resign by giving written notice:
- At least 60 days if paid monthly.
- At least 30 days otherwise.
Failure to serve the notice period may require the employee to compensate the employer with wages equal to the notice period (Article 76).
8. Resignation Without Notice
Article 81 outlines scenarios where employees may resign immediately without notice and still retain all rights:
- Employer’s failure to meet contractual or legal obligations.
- Fraud at the time of hiring.
- Assigning work fundamentally different from agreed terms.
- Assault or abuse by the employer or representatives.
- Dangerous workplace conditions threatening health or safety.
- Unfair or degrading treatment.
9. How to Calculate Benefits
Employees can calculate EOSB easily through the Qiwa platform by entering contract details, salary, and termination reason. This ensures clarity and avoids disputes with the employer.
For unused leave:
Daily wage × unused leave days
Conclusion
Resignation in Saudi Arabia is not just a personal decision but also a legal process that secures the employee’s financial rights. From EOSB and leave compensation to insurance entitlements and certificates, the Labor Law ensures employees leave with dignity and fairness. By understanding these rights, employees can make informed career decisions and smoothly transition to new opportunities.
Protect your rights after resignation in Saudi Arabia! Use SNDK platform to easily calculate your financial entitlements, end-of-service benefits, leave balance, and notice periods accurately.
FAQ
- What is the end-of-service benefit (EOSB) for a resigning employee?
- According to Articles 84 and 85: Half-month salary for each of the first five years, full month for subsequent years. Employees with 2–5 years get one-third, 5–10 years two-thirds, and over 10 years full EOSB.
- Is the employer required to settle dues after resignation?
- Yes, Article 88 requires the employer to settle all dues, including unpaid wages, within two weeks.
- Does the employee have the right to a service certificate?
- Yes, a free service certificate must include start and end dates, job title, and final salary, without negative remarks.
- How is unused leave compensated?
- According to Article 111: Monthly Salary ÷ 30 × Number of unused leave days.
- Does resignation affect social insurance entitlements?
- No, entitlements remain based on subscription period and circumstances, including lump sums, early retirement, or full withdrawal for non-Saudis.
- What is the notice period for resigning from an indefinite-term contract?
- 60 days for monthly-paid employees, 30 days otherwise (Article 75).
- Can an employee resign without notice and still retain all rights?
- Yes, Article 81 lists cases like employer’s breach of obligations, hiring fraud, assigning different work, assault, or dangerous workplace conditions