{"id":5415,"date":"2025-11-09T11:46:00","date_gmt":"2025-11-09T08:46:00","guid":{"rendered":"https:\/\/ost.sa\/?p=5415"},"modified":"2025-12-09T14:10:16","modified_gmt":"2025-12-09T11:10:16","slug":"termination-of-employment-relationship","status":"publish","type":"post","link":"https:\/\/ost.sa\/en\/termination-of-employment-relationship\/","title":{"rendered":"Termination of Employment Relationship | Guide"},"content":{"rendered":"<p dir=\"ltr\"><span style=\"font-weight: 400;\">Termination of Employment Relationship is a crucial topic for both employers and employees, as it marks the end of a professional journey and the start of a new chapter. The knowledge of the termination of an employment relationship, its causes and methods assists in safeguarding the rights of both involved parties and also makes sure the termination process is done in a fair and legal manner. Be it because of performance problems, the restructuring of the business or because of mutual understanding, being aware of the correct steps and ramifications can save the time of confrontations in the future and save the image of a business.<\/span><\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter-rtl ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #ffffff;color:#ffffff\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #ffffff;color:#ffffff\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/ost.sa\/en\/termination-of-employment-relationship\/#What_does_termination_mean\" >What does termination mean?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/ost.sa\/en\/termination-of-employment-relationship\/#What_are_the_legal_grounds_for_terminating_an_employees_contract\" >What are the legal grounds for terminating an employee&#8217;s contract?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/ost.sa\/en\/termination-of-employment-relationship\/#How_should_employers_properly_handle_the_termination_process\" >How should employers properly handle the termination process?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/ost.sa\/en\/termination-of-employment-relationship\/#What_are_employee_rights_after_termination\" >What are employee rights after termination?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/ost.sa\/en\/termination-of-employment-relationship\/#How_can_HR_ensure_a_smooth_termination_process\" >How can HR ensure a smooth termination process?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/ost.sa\/en\/termination-of-employment-relationship\/#What_is_the_difference_between_voluntary_and_involuntary_termination\" >What is the difference between voluntary and involuntary termination?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/ost.sa\/en\/termination-of-employment-relationship\/#How_is_end-of-service_gratuity_calculated_after_termination\" >How is end-of-service gratuity calculated after termination?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/ost.sa\/en\/termination-of-employment-relationship\/#Termination_of_employment_relationship_through_OST\" >Termination of employment relationship through OST<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/ost.sa\/en\/termination-of-employment-relationship\/#Ensuring_a_smooth_and_compliant_termination_process\" >Ensuring a smooth and compliant termination process<\/a><\/li><\/ul><\/nav><\/div>\n<h2 dir=\"ltr\"><span class=\"ez-toc-section\" id=\"What_does_termination_mean\"><\/span><strong>What does termination mean?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p dir=\"ltr\"><span style=\"font-weight: 400;\">Termination of Employment Relationship means officially ending the relationship between an employer and an employee. It may occur due to a number of reasons including termination of a fixed term contract, termination, cancellation or agreement between two parties. In the majority of the cases, the employer or the employee may terminate the employment in case there is legal reason.<\/span><\/p>\n<p dir=\"ltr\"><span style=\"font-weight: 400;\">In case of indefinite contracts, an employee can resign by giving a notice without explaining the cause whereas the employer has to have a reason which is valid and substantial enough to break the contract. Fixed-term contract on the other hand normally terminates automatically upon completion of the agreed period or work.<\/span><\/p>\n<p dir=\"ltr\"><span style=\"font-weight: 400;\">The employment relationship may be terminated on the spot without any prior warning, however, only in very severe circumstances, e.g. a significant violation of the contract. The two parties must practice equitable processes and the employer must notify and seek the advice of the employee before making final decisions.<\/span><\/p>\n<h2 dir=\"ltr\"><span class=\"ez-toc-section\" id=\"What_are_the_legal_grounds_for_terminating_an_employees_contract\"><\/span><strong>What are the legal grounds for terminating an employee&#8217;s contract?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p dir=\"ltr\"><span style=\"font-weight: 400;\">The act of termination of an employees contract is a grave legal process that should be proved on reasons that are well established and documented. To ensure the safety of both the employer and the employee, the employers must ensure that each and every termination is carried out in fair procedures and in line with the laws of employment.<\/span><\/p>\n<ol dir=\"ltr\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Performance Issues<\/span><span style=\"font-weight: 400;\">\n<p><\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Misconduct<\/span><span style=\"font-weight: 400;\">\n<p><\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Redundancy or Restructuring<\/span><span style=\"font-weight: 400;\">\n<p><\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Violation of Employment Contract<\/span><span style=\"font-weight: 400;\">\n<p><\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Inability to Perform Job Duties<\/span><span style=\"font-weight: 400;\">\n<p><\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Legal or Regulatory Violations<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><\/li>\n<\/ol>\n<h2 dir=\"ltr\"><span class=\"ez-toc-section\" id=\"How_should_employers_properly_handle_the_termination_process\"><\/span><strong>How should employers properly handle the termination process?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p dir=\"ltr\"><span style=\"font-weight: 400;\">Employers must manage Termination of Employment Relationship fairly, transparently, and in line with labor laws. It must begin with a legal cause that has been well documented and a meeting in which the employee is able to act. Written notification has to be very specific of the reason and date of termination.<\/span><\/p>\n<p dir=\"ltr\"><span style=\"font-weight: 400;\">The salary, notice payments, and any other unused leaves should also be paid on time. The use of legal and internal processes can avoid conflicts and make the process of terminating compliantly without any complications.<\/span><\/p>\n<h2 dir=\"ltr\"><span class=\"ez-toc-section\" id=\"What_are_employee_rights_after_termination\"><\/span><strong>What are employee rights after termination?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p dir=\"ltr\"><span style=\"font-weight: 400;\">Even after the expiry of a contract involving an employee, he or she has certain legal rights that safeguard his or her income and guarantee reasonable treatment. Such rights are based on the local labor laws but typically comprise the following:<\/span><\/p>\n<ol dir=\"ltr\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Final Salary Payment<\/span><span style=\"font-weight: 400;\">\n<p><\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Notice Period<\/span><span style=\"font-weight: 400;\">\n<p><\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">End-of-Service Benefits<\/span><span style=\"font-weight: 400;\">\n<p><\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Unemployment or Compensation Rights<\/span><span style=\"font-weight: 400;\">\n<p><\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Health Insurance and Benefits<\/span><span style=\"font-weight: 400;\">\n<p><\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Protection Against Unlawful Dismissal<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><\/li>\n<\/ol>\n<h2 dir=\"ltr\"><span class=\"ez-toc-section\" id=\"How_can_HR_ensure_a_smooth_termination_process\"><\/span><strong>How can HR ensure a smooth termination process?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p dir=\"ltr\"><span style=\"font-weight: 400;\">The process of termination must be smooth to ensure there is trust, compliance, and professionalism in the issuance of the employee. HR contributes significantly to a decent and effective transition. The key steps that the HR should take to make the process seamless are the following:<\/span><\/p>\n<ol dir=\"ltr\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Create a clear and transparent termination policy<\/span><span style=\"font-weight: 400;\">\n<p><\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Notify all relevant departments and stakeholders<\/span><span style=\"font-weight: 400;\">\n<p><\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Conduct a structured exit interview<\/span><span style=\"font-weight: 400;\">\n<p><\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Plan for knowledge transfer and task handover<\/span><span style=\"font-weight: 400;\">\n<p><\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Retrieve all company property<\/span><span style=\"font-weight: 400;\">\n<p><\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Secure access to data and company systems<\/span><span style=\"font-weight: 400;\">\n<p><\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Settle all financial obligations promptly<\/span><span style=\"font-weight: 400;\">\n<p><\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Communicate the departure professionally to the team<\/span><span style=\"font-weight: 400;\">\n<p><\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Gather feedback through exit surveys<\/span><span style=\"font-weight: 400;\">\n<p><\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Use HR software like <\/span>NotchHR<span style=\"font-weight: 400;\"> to automate and monitor the offboarding process<\/span><span style=\"font-weight: 400;\">\n<p><\/span><\/li>\n<\/ol>\n<p dir=\"ltr\"><span style=\"font-weight: 400;\">By following these steps, HR can reduce legal risks, maintain positive relationships with departing employees, and use their feedback to improve retention and workplace culture.<\/span><\/p>\n<h2 dir=\"ltr\"><span class=\"ez-toc-section\" id=\"What_is_the_difference_between_voluntary_and_involuntary_termination\"><\/span><strong>What is the difference between voluntary and involuntary termination?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p dir=\"ltr\"><span style=\"font-weight: 400;\">The key difference between voluntary and involuntary Termination of Employment Relationship lies in who initiates the end of the employment relationship.<\/span><\/p>\n<ul dir=\"ltr\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Voluntary Termination- It takes place when an employee voluntarily quits the company. This can occur owing to individual factors, improved employment, transfer or retirement.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Involuntary Termination\u2013 This occurs when the employer terminates the employment. It can be the case of poor work performance, policy infraction, misconduct, or the restructuring and layoffs of the company.<\/span><\/li>\n<\/ul>\n<p dir=\"ltr\"><span style=\"font-weight: 400;\">Concisely, voluntary termination is whereby the employee decides to retire and involuntary termination is where the employer decides who to retire.<\/span><\/p>\n<h2 dir=\"ltr\"><span class=\"ez-toc-section\" id=\"How_is_end-of-service_gratuity_calculated_after_termination\"><\/span><strong>How is end-of-service gratuity calculated after termination?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p dir=\"ltr\"><span style=\"font-weight: 400;\">In Saudi Arabia, end-of-service gratuity is a mandatory payment employers must provide when an employee\u2019s service ends, whether due to resignation or termination. It\u2019s calculated based on the employee\u2019s <\/span><i><span style=\"font-weight: 400;\">last basic salary<\/span><\/i><span style=\"font-weight: 400;\"> and <\/span><i><span style=\"font-weight: 400;\">total years of service<\/span><\/i><span style=\"font-weight: 400;\"> according to Articles 85 and 87 of the Saudi Labor Law.<\/span><\/p>\n<p dir=\"ltr\"><span style=\"font-weight: 400;\">Here\u2019s how it works after termination:<\/span><\/p>\n<ul dir=\"ltr\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Less than 1 year of service:<\/b><span style=\"font-weight: 400;\"> No gratuity is paid.<\/span><span style=\"font-weight: 400;\">\n<p><\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Between 1 and 5 years of service:<\/b><span style=\"font-weight: 400;\"> Half a month\u2019s salary for each year worked.<\/span><span style=\"font-weight: 400;\">\n<p><\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>More than 5 years of service:<\/b><span style=\"font-weight: 400;\"> One month\u2019s salary for each additional year.<\/span><span style=\"font-weight: 400;\">\n<p><\/span><\/li>\n<\/ul>\n<p dir=\"ltr\">If the termination occurs due to reasons beyond the employee\u2019s control (as outlined in Article 87), they are entitled to full gratuity, regardless of their service duration.<\/p>\n<p dir=\"ltr\"><span style=\"font-weight: 400;\">This calculation ensures fair compensation for employees based on their length of service and final wage at the time of termination.<\/span><\/p>\n<h2 dir=\"ltr\"><span class=\"ez-toc-section\" id=\"Termination_of_employment_relationship_through_OST\"><\/span><strong>Termination of employment relationship through OST<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p dir=\"ltr\">Managing the end of an employment relationship can be complex, especially when compliance and documentation are involved. With <a href=\"https:\/\/ost.sa\/en\/\" target=\"_blank\" rel=\"noopener\">OST<\/a>, you can simplify the entire termination process through a secure, government-approved platform designed to protect both employers and employees.<\/p>\n<p dir=\"ltr\"><span style=\"font-weight: 400;\">From submitting termination requests to finalizing settlements in line with Saudi labor regulations, OST ensures every step is handled transparently and efficiently.<\/span><\/p>\n<p dir=\"ltr\">Take control of your HR processes today \u2014 streamline employment termination through OST.sa and ensure full compliance with Saudi labor law.<\/p>\n<h2 dir=\"ltr\"><span class=\"ez-toc-section\" id=\"Ensuring_a_smooth_and_compliant_termination_process\"><\/span><strong>Ensuring a smooth and compliant termination process<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p dir=\"ltr\"><span style=\"font-weight: 400;\">Ending an employment relationship requires careful handling to maintain fairness, protect company interests, and comply with labor laws. A structured process helps prevent disputes and ensures a positive offboarding experience for both parties.<\/span><\/p>\n<p dir=\"ltr\"><span style=\"font-weight: 400;\">Employers should clearly document every step, provide notice in accordance with legal requirements, and process final settlements accurately. Maintaining transparency and professionalism throughout reflects the organization\u2019s integrity and supports future employer branding.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Termination of Employment Relationship is a crucial topic for both employers and employees, as it marks the end of a professional journey and the start of a new chapter. The knowledge of the termination of an employment relationship, its causes and methods assists in safeguarding the rights of both involved parties and also makes sure [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":5416,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[41],"tags":[],"class_list":["post-5415","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog"],"acf":[],"_links":{"self":[{"href":"https:\/\/ost.sa\/en\/wp-json\/wp\/v2\/posts\/5415","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ost.sa\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ost.sa\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ost.sa\/en\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/ost.sa\/en\/wp-json\/wp\/v2\/comments?post=5415"}],"version-history":[{"count":0,"href":"https:\/\/ost.sa\/en\/wp-json\/wp\/v2\/posts\/5415\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ost.sa\/en\/wp-json\/wp\/v2\/media\/5416"}],"wp:attachment":[{"href":"https:\/\/ost.sa\/en\/wp-json\/wp\/v2\/media?parent=5415"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ost.sa\/en\/wp-json\/wp\/v2\/categories?post=5415"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ost.sa\/en\/wp-json\/wp\/v2\/tags?post=5415"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}