Article 76 of the Saudi Labor Law
المادة 76 من نظام العمل · الباب الخامس: علاقات العمل
Whoever ends an open-ended contract without observing the notice period in Article 75 must pay the other party a sum equal to the worker's wage for that period, unless they agree on more.
Official text after amendments (Arabic)
Compiled from the original text and every officially published amendment; the amendments are shown in full below for comparison.
إذا لم يراع الطرف الذي أنهى العقد غير المحدد المدة المهلة المحدد للإشعار وفقاً للمادة (الخامسة والسبعين) من هذا النظام، فإنه يلتزم بأن يدفع للطرف الآخر عن مهلة الإشعار مبلغاً مساوياً لأجر العامل عن المهلة نفسها، ما لم يتفق الطرفان على أكثر من ذلك.
This is the official Arabic wording, the only legally binding version. We do not translate the law itself; the explanation below is ours. Official source: Bureau of Experts at the Council of Ministers
Article 76 explained in plain English
Article 76 of the Labor Law deals with a common situation: one of the parties to an open-ended contract decides to end it without observing the notice period required by Article 75. The Law does not prevent immediate termination, but attaches to it a specific price, namely payment in lieu of notice.
The notice period to which the article refers appears in Article 75 as follows:
- If the wage is paid monthly: at least 30 days if the termination is by the worker, and at least 60 days if the termination is by the employer.
- If the wage is not paid monthly: at least 30 days whichever party ends the contract.
What follows if the period is not observed?
- The party that ended the contract must pay the other party a sum equal to the worker's wage for the notice period itself.
- The rule applies to both parties: an employer who ends the contract immediately pays the worker, and a worker who leaves work without notice pays the employer. The measure of calculation in both cases is the same, namely the worker's wage.
- The parties may agree on a sum greater than this, which means this payment is a minimum, and any agreement for a lesser payment contradicts the text.
How does this article relate to Article 77? The payment in lieu of notice in Article 76 relates to the form of termination (failure to give the notice period), while the compensation in Article 77 relates to the reason for termination if it is not legitimate, and is calculated differently (15 days' wage for each year of service in an open-ended contract, with a minimum of two months' wage). The legal basis of each therefore differs, and it is advisable to consult a labor lawyer to assess what the injured party is entitled to in each case individually.
The text in force of the article is its wording after the amendment by Royal Decree No. M/46 dated 5/6/1436 AH.
Practical example
Ahmed works at a company in Riyadh under an open-ended contract with a monthly wage of SAR 8,000. The company decided to end his contract for a legitimate reason, but informed him on the same day and asked him not to attend from the next day, without giving him the 60-day notice period set in Article 75. Under Article 76, the company must pay Ahmed a sum equal to his wage for 60 days, unless his contract provides for a higher payment. By contrast, if Ahmed were the one who left work suddenly without giving written notice at least 30 days in advance, he would be obliged to pay the company the equivalent of his wage for 30 days.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
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Active contributorFrequently asked questions about Article 76 of the Saudi Labor Law
May an employer end a contract immediately without a notice period?
Article 76 does not prevent ending without observing the period, but it requires whoever ends an open-ended contract without observing the notice period in Article 75 to pay the other party a sum equal to the worker's wage for that period.
How is the payment in lieu of notice in Article 76 calculated?
It is a sum equal to the worker's wage for the notice period itself, which is 60 days if the termination is by the employer and 30 days if by the worker where the wage is paid monthly, and 30 days for both parties if the wage is not paid monthly, unless the parties agree on more.
Does a worker pay payment in lieu of notice if they leave work without notice?
Yes. Article 76 addresses whichever party ended the contract, so if the worker leaves work without observing the notice period, they must pay the employer a sum equal to their wage for the period.
Can a payment in lieu of notice lower than the wage for the period be agreed in the contract?
The text permits agreeing only on more than the wage for the period, and does not permit agreeing on less.
Amendment history
Royal Decree No. M/46 — 5/6/1436 AH
Official amendment text (Arabic)
تم تعديل هذه المادة بموجب المرسوم الملكي رقم ( م/ 46) وتاريخ 5 / 6 / 1436 هـ ؛ لتكون بالنص الآتي:
"إذا لم يراع الطرف الذي أنهى العقد غير المحدد المدة المهلة المحدد للإشعار وفقاً للمادة (الخامسة والسبعين) من هذا النظام، فإنه يلتزم بأن يدفع للطرف الآخر عن مهلة الإشعار مبلغاً مساوياً لأجر العامل عن المهلة نفسها، ما لم يتفق الطرفان على أكثر من ذلك".
Original text before the amendments (Arabic)
إذا لم يراع الطرف الذي أنهى العقد المدة المذكورة في المادة الخامسة والسبعين من هذا النظام فإنه يلزم بأن يدفع للطرف الآخر تعويضًا معادلًا لأجر العامل عن مدة الإشعار، أو المتبقي منها، ويتخذ الأجر الأخير للعامل أساسًا لتقدير التعويض، وذلك بالنسبة إلى العمال الذين يتقاضون أجورهم بالمعيار الزمني.
أما بالنسبة إلى العمال الذين يتقاضون أجورهم بمعيار آخر فيراعى في التقدير ما ورد في المادة السادسة والتسعين من هذا النظام.
Articles this article refers to
More articles on Terminating the Employment Contract
- Article 57
Article 57 provides that an employment contract concluded to perform a specific job ends automatically once the agreed work is completed.
إذا كان العقد من أجل القيام بعمل معين فإنه ينتهي بإنجاز العمل المتفق عليه.
- Article 64Amended (1436 AH)
Article 64 requires the employer, on the end of the contract, to give the worker a free service certificate free of anything harmful to them, and to return all certificates and documents they deposited with it.
يلتزم صاحب العمل عند انتهاء عقد العمل بما يأتي : 1 - أن يعطي العامل – بناءً على طلبه – شهادة خدمة دون مقابل، يوضح فيها تاريخ التحاقه بالعمل، وتاريخ انتهاء علاقت
- Article 66
Article 66 sets out exhaustively the six disciplinary sanctions an employer may impose on a worker, from a warning to dismissal in the cases set in the Law.
الجزاءات التأديبية التي يجوز لصاحب العمل توقيعها على العامل: 1 - الإنذار. 2 - الغرامة. 3 - الحرمان من العلاوة أو تأجيلها لمدة لا تزيد على سنة متى كانت مقررة من
- Article 74Amended by M/44
Article 74 lists the cases in which an employment contract ends, including written agreement of the parties, expiry of the term, resignation, reaching retirement age, force majeure, permanent closure of the establishment, and bankruptcy.
ينتهي عقد العمل في أي من الأحوال الآتية : 1 - إذا اتفق الطرفان على إنهائه، بشرط أن تكون موافقة العامل كتابية. 2 - إذا انتهت المدة المحددة في العقد، ما لم يكن ال
- Article 75Amended by M/44
Article 75 sets the written notice period for ending an open-ended contract for a legitimate reason: 60 days from the employer and 30 days from the worker if wages are monthly, and 30 days for both otherwise.
1- إذا كان العقد غير محدد المدة وكان الأجر يدفع شهريًّا، جاز لأي من طرفيه إنهاؤه بناءً على سبب مشروع، وفق ما يلي: أ- إذا كان الإنهاء من طرف العامل، فيجب عليه أن
- Article 77Amended (1436 AH)
Article 77 sets the compensation due to the party harmed by termination of an employment contract for an illegitimate reason, where the parties have not agreed a specific compensation in the contract.
ما لم يتضمن العقد تعويضاً محدداً مقابل إنهائه من أحد الطرفين لسبب غير مشروع، يستحق الطرف المتضرر من إنهاء العقد تعويضاً على النحو الآتي : 1 - أجر خمسة عشر يوماً
The texts are reproduced from the official website of the Bureau of Experts at the Council of Ministers for reference; where they differ, the officially published Arabic text prevails. This content is not legal advice.