Article 75 of the Saudi Labor Law is an important provision for employers and employees because it governs the termination of indefinite employment contracts and sets out the notice requirements that must be followed. In practice, understanding Article 75 is essential when reviewing contract termination, notice periods, valid reasons for dismissal, and related employee rights in Saudi Arabia.
This guide explains what Article 75 of the Saudi Labor Law means, how indefinite employment contracts may be terminated, what compensation may apply in unlawful termination cases, and which other termination-related provisions employers and employees should also be aware of.
Also read: Limited vs Unlimited Contract in UAE
Article 75 addresses the termination of an employment contract that is made for an indefinite period. It gives both parties the right to terminate the contract, provided that the termination is based on a valid reason and the required written notice is given in accordance with the law.
This provision is important because it helps regulate how an indefinite employment relationship can end while reducing the risk of arbitrary dismissal or avoidable disputes.
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Where an employment contract does not specify a fixed term, it is generally treated as an indefinite contract. Under Article 75, either the employer or the employee may terminate such a contract, but the termination must comply with the legal notice requirements and should be supported by a valid reason.
The reason for termination should be stated clearly in the notice to help avoid conflict and reduce the risk of later legal disputes.
Where an employment contract is terminated without a proper legal reason, compensation may become payable depending on the type of contract and the circumstances of the dismissal.
Because termination disputes can involve legal and financial consequences, employers should review the contract type, the reason for dismissal, and the applicable notice and compensation rules carefully before proceeding.
Saudi labor law also recognizes certain serious situations in which an employee may be dismissed immediately without notice or end-of-service-related protections that would otherwise apply, subject to the legal requirements of the relevant provisions.
Both employers and employees should understand the main circumstances in which an employment contract may lawfully come to an end.
A clear written record of the basis for termination is always important to reduce the risk of future employment disputes.
End-of-service award is an important employee entitlement under Saudi labor law. It is generally linked to the employee’s years of service and forms part of the financial rights that may arise when the employment relationship ends.
Also read: Termination of Employment Contract in UAE
Article 75 plays a central role in the Saudi employment framework because it helps define how indefinite contracts may be terminated fairly and lawfully. It also works alongside other labor law provisions relating to compensation, immediate dismissal, and contract expiry.
For employers, this means termination decisions should be documented carefully and supported by valid reasons. For employees, it means understanding the rights attached to notice, compensation, and end-of-service entitlements.
Article 75 of the Saudi Labor Law is one of the key provisions governing contract termination for indefinite employment relationships. When combined with the related rules on notice, compensation, dismissal grounds, and end-of-service awards, it provides an important legal framework for managing employment exits in Saudi Arabia.
Businesses and employees should review these rules carefully to ensure contract termination is handled properly and in line with the applicable labor law requirements.