The termination of employment in Saudi Arabia is a sensitive legal matter that requires careful consideration. An employer’s decision to terminate an employment relationship is not based solely on the employer’s desire to end the contract; it is governed by the Saudi Labor Law, the nature of the alleged violation, the available evidence, and the procedures followed before the decision is issued.

Employers may encounter situations in which an employee is absent without justification, refuses to perform essential duties, discloses confidential business information, or engages in conduct that harms the company’s interests. Conversely, an employee may unexpectedly receive a termination notice citing Article 80 of the Saudi Labor Law, despite believing that their conduct does not justify dismissal without end-of-service benefits, notice, or compensation.

It is therefore essential to distinguish between termination based on a lawful ground and proper procedures, and unlawful termination that may entitle the affected employee to compensation and other statutory rights.

Can a company dismiss an employee immediately after a workplace violation? Is absence or poor performance sufficient to invoke Article 80? What rights does an employee have if they believe their dismissal lacks a valid legal basis?

This article examines the key provisions governing employment contract termination in Saudi Arabia, the circumstances in which an employer may terminate a contract without end-of-service benefits, notice, or compensation, and the legal considerations that both employers and employees should understand before taking action.

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First: What Does Termination Without Compensation Mean?

Termination without end-of-service benefits, notice, or compensation refers to ending an employment relationship under specific circumstances permitted by Saudi Labor Law, subject to the applicable statutory conditions and procedures.

Article 80 of the Saudi Labor Law identifies circumstances in which an employer may terminate an employment contract without awarding the employee end-of-service benefits, notice, or compensation, provided that the employee is given the opportunity to explain their objections to the termination.

Article 80 is not a general authorization allowing employers to dismiss employees for any workplace violation. It is an exception that applies only when the facts satisfy one of the circumstances specified by law.

If an employee commits a violation that does not fall within the statutory grounds, relying on Article 80 may be legally unjustified, even if the employer has concerns about the employee’s conduct or performance.

Likewise, simply stating “termination under Article 80” in a dismissal letter does not automatically make the decision lawful. The validity of the termination depends on the actual circumstances, the applicable statutory requirements, and the evidence and procedures involved.

It is also important to distinguish between:

• • Dismissal under Article 80.

• • Termination on a lawful ground under the general provisions of the Labor Law.

• • Unlawful termination that may give rise to compensation under Article 77.

Second: When Can an Employer Terminate an Employee Under Article 80?

Article 80 specifies circumstances in which an employer may terminate an employment contract without end-of-service benefits, notice, or compensation, subject to the requirement that the employee be given an opportunity to explain their objections.

The principal circumstances include the following.

1. Assault During or Because of Work

Article 80 may apply if an employee assaults the employer, the responsible manager, or a supervisor or subordinate during work or because of work.

The circumstances and nature of the incident must be examined, together with the available evidence. A general description of a workplace disagreement as an assault is not sufficient on its own.

A dispute may involve a verbal or professional disagreement, while another incident may involve actual physical aggression. Each situation must be assessed according to the established facts and applicable legal provisions.

2. Failure to Fulfill Essential Obligations or Disobedience of Lawful Instructions

Article 80 may apply when an employee fails to perform essential obligations arising from the employment contract, refuses to comply with lawful instructions, or deliberately violates posted workplace safety instructions despite having received a written warning, where the statutory conditions are satisfied.

However, not every professional mistake or delay in completing a task justifies dismissal without compensation.

The employer should assess the nature and importance of the obligation, the circumstances of the violation, and the specific requirements of the applicable statutory provision.

The lawfulness of the instruction is also important. Employees are not automatically required to comply with every managerial instruction regardless of whether it is lawful.

3. Misconduct or an Act Contrary to Honor or Integrity

Article 80 permits termination when an employee is proven to have engaged in misconduct or committed an act contrary to honor or integrity.

The employer must establish the underlying facts and determine whether they meet the relevant statutory standard.

General accusations, rumors, and personal disagreements are not sufficient substitutes for evidence. A distinction must be made between proven conduct and unsupported allegations.

4. Deliberately Causing Material Loss to the Employer

Article 80 may apply when an employee deliberately commits an act or omission intended to cause material loss to the employer.

In this situation, the employer must report the incident to the competent authorities within 24 hours of becoming aware of it, as required by the applicable provision.

A financial loss alone does not establish deliberate wrongdoing. The loss may have resulted from an unintentional mistake, an operational failure, a management decision, or other circumstances.

The employer should therefore verify the facts, establish the required intent, and comply with the statutory reporting deadline.

5. Forgery to Obtain Employment

If an employee is proven to have used forgery to obtain employment, the circumstances may fall within Article 80.

The employer must establish that forgery occurred and that it was connected to obtaining the position. A minor discrepancy in information or a document requiring clarification should not automatically be treated as proof of forgery.

6. Employment During the Probationary Period

Article 80 also addresses employees appointed subject to probation.

In such cases, the applicable probationary-period provisions must be considered, including the requirement to expressly provide for probation in the employment contract and to establish its duration in accordance with the law.

Articles 53 and 54 regulate probationary periods, including their maximum duration and the conditions governing the employee’s placement under probation again.

Termination during a valid probationary period should not be confused with the termination of an employee whose probationary period has expired or whose probationary arrangements do not satisfy the statutory requirements.

7. Absence Without a Valid Reason

Absence may justify termination under Article 80, but not every instance of absence permits dismissal without end-of-service benefits, notice, or compensation.

The application of this provision depends on exceeding the statutory absence thresholds and satisfying the applicable written-warning requirements.

Generally, the relevant thresholds include absence exceeding 30 days during one contractual year or 15 consecutive days, subject to the applicable statutory conditions and the required written warnings before dismissal.

Employers should maintain accurate attendance records, documentation of absences, copies of written warnings, and any explanations or supporting documents submitted by the employee.

8. Improperly Exploiting One’s Position for Personal Gain

Article 80 may apply if an employee is proven to have improperly exploited their position to obtain personal benefits.

Depending on the circumstances, the investigation may involve reviewing the employee’s authority, transaction records, correspondence, and relevant documents.

The decision must be based on verifiable facts rather than suspicion or a disagreement between management and the employee.

9. Disclosure of Industrial or Commercial Secrets

Article 80 protects industrial and commercial secrets associated with the employer’s business and permits termination when an employee is proven to have disclosed such secrets.

Relevant incidents may involve the unauthorized disclosure of confidential commercial information, protected data, or internal business details, depending on the nature of the information and the employee’s obligations.

However, employers must distinguish between disclosing protected confidential information and sharing public information or exercising a lawful right to submit a complaint or defend a legal claim.

The assessment should consider the nature of the information, how it was obtained, whether it was confidential, and the circumstances of its disclosure.

Third: Is Any Workplace Violation Sufficient to Dismiss an Employee Without Compensation?

No. The mere occurrence of a workplace violation does not automatically justify dismissal under Article 80.

The employer must identify the nature of the violation, determine whether it falls within one of the statutory grounds, and satisfy the conditions applicable to that ground.

For example, an employee may delay completing a task or make a professional mistake. Neither circumstance automatically authorizes the employer to terminate the employment contract without end-of-service benefits, notice, or compensation.

A distinction must be made between misconduct that warrants a proportionate disciplinary measure and conduct that satisfies the requirements for exceptional termination.

Employers should consider the following measures:

• • Clearly identify the alleged violation.

• • Collect relevant evidence and supporting documents.

• • Review the employment contract, work regulations, and applicable workplace policies.

• • Verify the statutory conditions governing the specific circumstances.

• • Give the employee an opportunity to explain their objections to the termination.

• • Document the relevant procedures, decisions, and correspondence.

Employers should avoid making dismissal decisions based on personal disputes, subjective assessments, or unverified allegations.

Conversely, an employee’s disagreement with a dismissal decision does not, by itself, establish that the termination was unlawful. The outcome depends on the facts, the evidence, and the applicable legal provisions.

Fourth: What Rights Does an Employee Have After Dismissal Under Article 80?

An employee who receives a termination notice citing Article 80 should not automatically assume that all their rights have been lost. Equally, they should not assume that the decision is unlawful merely because they disagree with it.

The first step is to review the stated grounds for dismissal and the procedures followed, then determine whether the incident falls within one of the statutory circumstances.

The employee should review the following matters.

1. The Reason for Termination

The employee should identify the alleged violation, the facts underlying the decision, and how those facts relate to the statutory ground cited in the termination notice.

2. The Supporting Evidence

The employee should review the records and documents relied upon by the employer and identify any relevant evidence, correspondence, or witnesses that may clarify the circumstances.

3. The Opportunity to Object

Article 80 requires the employee to be given an opportunity to explain their objections to the termination.

The employee should therefore examine whether this opportunity was provided and how their response was handled, taking into account the circumstances and applicable procedures.

4. Outstanding Financial Entitlements

Even when the parties disagree about the grounds for dismissal, the employee should review unpaid wages and other financial entitlements accrued before the employment relationship ended.

The amounts payable must be determined according to the applicable law, employment contract, and facts of the case.

5. The Right to Challenge the Decision

If the employee believes Article 80 was applied without satisfying its requirements, they may consider pursuing a labor claim through the appropriate official channels.

Relevant documents may include the employment contract, termination notice, correspondence, attendance records, and other evidence supporting the employee’s position.

Filing a claim does not automatically guarantee compensation. The outcome depends on the evidence, the legality of the termination, and the decision of the competent authority.

Fifth: When Is Employment Termination Considered Unlawful?

Termination without a valid legal basis may entitle the affected party to compensation under the applicable statutory provisions.

Article 77 of the Saudi Labor Law governs compensation for termination without a lawful reason, unless the employment contract provides for a specified compensation amount in accordance with the law.

Under Article 77, compensation is generally calculated as follows:

• • Indefinite-term contract: 15 days’ wages for each year of service.

• • Fixed-term contract: Wages for the remaining period of the contract.

• • Minimum compensation: The calculated compensation must not be less than two months’ wages, subject to the statutory rules governing any agreed contractual compensation.

This does not mean that every employee whose employment ends is automatically entitled to this compensation. The circumstances must first establish unlawful termination and the applicability of Article 77.

Compensation for unlawful termination must also be distinguished from compensation for failure to observe the required notice period.

Article 76 addresses compensation associated with failure to comply with notice requirements, while Article 77 addresses compensation for termination without a lawful reason.

Each claim must therefore be assessed separately. End-of-service benefits, compensation for unlawful termination, and amounts payable for failure to observe notice requirements are distinct legal entitlements.

Sixth: Can an Employer Terminate an Employee for Poor Performance?

Poor performance may lead to disputes between employers and employees, particularly when a company uses performance indicators, monthly targets, or defined quality standards.

However, poor performance does not automatically justify dismissal without compensation under Article 80.

If an employer intends to take action because of poor performance, the employer should clearly identify the deficiencies, review the employee’s contractual duties, examine the reasons for the performance issues, and determine the appropriate legal procedure.

Employers should rely on documented performance evaluations, clearly communicated expectations, and properly recorded feedback and warnings where applicable, rather than vague assessments such as “unsuitable for the job” without supporting facts.

It is also important to distinguish between failure to meet a professional target because of circumstances beyond the employee’s control and a substantial breach of obligations or disobedience of lawful instructions in circumstances covered by the law.

If none of the statutory grounds for dismissal without end-of-service benefits, notice, or compensation applies, the employer should not use Article 80 simply to bring the employment relationship to an end.

Instead, the employer must consider the provisions governing termination, including the applicable lawful grounds, notice requirements, and any compensation that may be payable depending on the type of contract and the circumstances.

Seventh: What Is the Difference Between Articles 80 and 81 of the Saudi Labor Law?

A common mistake is to focus exclusively on the employer’s right to terminate an employment contract without considering the employee’s statutory right to leave work without notice in certain circumstances.

Article 80 identifies the circumstances in which an employer may terminate an employment contract without end-of-service benefits, notice, or compensation, subject to the applicable conditions.

Article 81, by contrast, addresses circumstances in which an employee may leave work without notice while retaining their statutory rights.

Examples of circumstances addressed by Article 81 include:

• • The employer’s failure to fulfill essential contractual or statutory obligations toward the employee.

• • Fraud at the time of contracting concerning the terms or conditions of employment.

• • Assigning the employee work that differs substantially from the agreed work, contrary to the applicable legal requirements.

• • Assault or conduct contrary to accepted standards of behavior in the circumstances specified by law.

• • Cruel, unjust, or humiliating treatment by the employer or responsible manager.

• • A serious workplace danger threatening the employee’s safety or health, where the employer knows about the danger but fails to take the necessary steps to remove it.

• • The employer’s actions unlawfully compelling the employee to appear to be the party who terminated the employment relationship.

Each circumstance has its own requirements. A party’s subjective belief that they have been treated unfairly is not, by itself, sufficient to establish that a statutory ground applies.

The facts should be documented, and the relevant legal provisions should be reviewed before either party terminates the contract or leaves work.

This distinction demonstrates that Saudi Labor Law does not grant either party unlimited authority over the employment relationship. Instead, it regulates both parties’ rights and obligations and establishes the circumstances in which the relationship may be terminated and the resulting legal consequences.

Eighth: How Can Companies Reduce Labor Disputes When Terminating Employees?

Employers can reduce the risk of labor disputes by establishing clear internal procedures for handling workplace violations and termination decisions.

The following practices are particularly important.

1. Review Employment Contracts

Ensure that the nature of the work, essential obligations, probationary arrangements, contract type, duration, and termination provisions are clearly established.

2. Apply Workplace Regulations

Disciplinary procedures should comply with the law and the applicable work regulations, and should be applied consistently according to clear standards.

3. Document Workplace Violations

Accurate documentation helps establish what occurred, when it occurred, and what actions were taken.

Records may include attendance logs, correspondence, reports, and documents related to the alleged violation.

4. Comply With Written-Warning Requirements

Where the law requires a written warning, the employer should comply with the applicable requirements concerning its form, timing, and any relevant statutory period.

Dismissal should not proceed until the necessary conditions have been satisfied.

5. Give the Employee an Opportunity to Respond

Article 80 requires the employee to be given an opportunity to explain their objections to the termination.

The employer should therefore establish a clear procedure for receiving and documenting the employee’s response and any supporting evidence.

6. Review the Decision Before Approval

Before terminating a contract under Article 80, the employer should review the facts, evidence, and statutory requirements to determine whether the circumstances genuinely fall within one of the permitted grounds.

7. Settle Outstanding Financial Entitlements

After the employment relationship ends, the employer should review wages and other financial entitlements that must be settled under the law.

A dispute over the grounds for dismissal should not automatically be treated as eliminating all outstanding financial obligations.

These practices can improve the quality of employment decisions and reduce the risk of disputes that might otherwise have been avoided through proper documentation and legal review.

Ninth: What Should an Employee Do if They Believe Their Dismissal Was Unlawful?

An employee who believes their dismissal lacks a lawful basis should approach the matter systematically rather than relying solely on verbal objections or informal disputes that may be difficult to prove later.

The employee can begin by taking the following steps:

1. 1. Keep a copy of the employment contract, termination notice, and relevant correspondence.

1. 1. Request clarification of the grounds for termination if they are not clearly stated.

1. 1. Collect supporting evidence, including attendance records, reports, and relevant communications.

1. 1. Review any financial entitlements that remain unpaid.

1. 1. Consider submitting a complaint through the official channels responsible for labor dispute resolution.

1. 1. Seek legal advice if the facts are complex or there is a dispute concerning the interpretation or application of the law.

Many private-sector labor disputes initially proceed through the amicable settlement process administered by the Ministry of Human Resources and Social Development, subject to the applicable procedures and jurisdictional rules.

If the dispute cannot be resolved amicably, the claim may be referred to the competent labor court through the applicable legal process.

Employees should also pay attention to statutory deadlines and avoid delaying the review of their rights for an extended period after employment ends.

Any claim should be supported by clear facts and documentation, with the requested remedies identified precisely. These may include unpaid wages, end-of-service benefits, compensation, or other entitlements available under the applicable law.

Tenth: The Role of a Lawyer in Employment Termination Disputes

Employment termination disputes may require a detailed review of the employment contract, workplace regulations, termination notice, and evidence relied upon by each party.

A lawyer can assist an employer in assessing whether Article 80 applies to the circumstances, reviewing warnings and documentation, evaluating procedural compliance, and identifying potential legal risks before a termination decision is approved.

A lawyer can also help an employee understand their rights, assess whether the termination was lawful, review potential financial entitlements and compensation, and prepare the documentation required to pursue a claim where a legal basis exists.

Legal review is particularly valuable in cases involving allegations of forgery, disclosure of commercial secrets, deliberate financial loss, or repeated absence, as these matters may require careful assessment of the evidence, statutory conditions, and procedures.

However, no particular outcome can be guaranteed merely by referring to a statutory provision. The result depends on the established facts, supporting documents, procedures followed, and the determination of the competent authority.

Conclusion: Can a Company Dismiss an Employee Without Compensation?

Saudi Labor Law permits employers to terminate employment contracts without end-of-service benefits, notice, or compensation in specific circumstances identified in Article 80. It does not grant employers unlimited authority to dismiss employees without complying with legal requirements.

The employer must establish that the relevant statutory ground applies, satisfy the associated conditions, give the employee an opportunity to explain their objections, and comply with other applicable legal provisions.

Employees, in turn, may review and challenge a dismissal decision if they believe Article 80 was applied without satisfying its requirements. They should also assess their outstanding financial entitlements and the legal procedures available to them.

The key practical principle is that the legality of an employment termination depends not merely on the wording of the dismissal letter, but on the actual reason for termination, the available evidence, and compliance with Saudi Labor Law.

Reviewing the circumstances before making a termination decision or filing a claim can help both parties understand their rights and obligations and reduce the risk of labor disputes.

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Official Sources

• • Ministry of Human Resources and Social Development: Labor Relations and Saudi Labor Law.

• • Ministry of Human Resources and Social Development: Employment Contract Termination.

• • Bureau of Experts at the Council of Ministers: Laws and Regulations.

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Suleiman Al-Omari Law Office

Lawyers and Legal and Sharia Consultants

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Legal Disclaimer

This article is intended for general informational purposes regarding employment contract termination under the laws of the Kingdom of Saudi Arabia. It does not constitute legal advice for any specific case.

Each case must be assessed according to its particular facts, supporting documentation, and the applicable legislation in force. Readers are advised to consult official sources and obtain specialized legal advice before taking any action.