Unfair Dismissal in Saudi Arabia_ What Can Employees Claim
                     Unfair Dismissal in Saudi Arabia: What 
Can Employees Claim?
Unfair dismissal in Saudi Arabia occurs when an employer ends an employment contract 
without one of the legitimate grounds set out in Saudi Labor Law, most notably outside the 
limited misconduct grounds in Article 80. An employee dismissed this way can typically claim 
end-of-service benefits (EOSB), unpaid wages and leave, notice-period pay, and additional 
compensation under Article 77, which is no less than two months' wages.
Losing a job without warning is stressful on its own. It becomes a legal problem the moment 
the reason given or not given for termination in Saudi Arabia doesn't meet the standard the law 
 sets. Saudi Labor Law does not require employers to justify every decision, but it draws a firm 
line between a lawful termination and unfair dismissal Saudi Arabia courts will act on. For 
employees, understanding that line is the first step to knowing what compensation and benefits 
they are entitled to claim. This guide, prepared by ABF Law Firm, explains what unfair or 
wrongful termination Saudi Arabia law actually covers, what employees can claim, how 
compensation is calculated, and how to file a labor complaint.
What Is Unfair Dismissal Under Saudi Labor Law?
Saudi Labor Law does not use the exact phrase "unfair dismissal," but the concept is built into 
the statute through a combination of articles:
● Article 74 sets out the recognized ways an employment relationship can lawfully end 
mutual agreement, contract expiry, or termination on legitimate grounds.
● Article 75 governs termination of indefinite contracts by either party with proper 
notice.
● Article 80 lists the only grounds on which an employer may dismiss an employee 
immediately, without notice and without end-of-service benefits and the list is exhaustive.
● Article 77 applies whenever a contract is ended without a lawful reason recognized 
elsewhere in the law, and it is the article that entitles the affected employee to 
compensation.
In practice, a dismissal is treated as unfair or wrongful dismissal Saudi Arabia law will 
compensate when an employer cannot point to a valid Article 80 ground, has not followed the 
required disciplinary process, or has dismissed an employee for a reason the law does not 
recognize such as retaliation for filing a complaint, reporting a safety violation, or refusing an 
unlawful instruction. Forcing an employee to resign through demotion, salary cuts, or humiliating 
treatment can also be treated as constructive dismissal and assessed the same way as an 
arbitrary termination.
Grounds an Employer Can Legally Use and What Doesn't 
Qualify
Article 80 permits dismissal without notice or benefits only in specific, serious circumstances. 
Saudi labor courts apply this list narrowly and place the burden of proof on the employer.
Valid Article 80 grounds (exhaustive) Generally NOT valid grounds
Assault on the employer or a manager during work Ordinary performance issues without 
prior warnings
Failure to perform essential contractual duties Company restructuring or 
cost-cutting
Serious misconduct affecting honesty or integrity Personality clashes or internal 
disagreements
Intentional damage to the employer's property or Filing a labor complaint or grievance
interests
Forgery used to obtain the job Pregnancy, marriage, or protected 
personal status
Unexcused absence beyond the statutory threshold A single instance of tardiness
(with prior written warning)
Disclosure of confidential trade information Reporting a safety or legal violation
Sources: Saudi Labor Law, Bureau of Experts at the Council of Ministers; Ministry of 
Human Resources and Social Development (MHRSD) guidance on Article 80.
Even where a listed ground genuinely applies, the employer must still follow a documented 
disciplinary process, written warnings where required, and an opportunity for the employee to 
respond before invoking Article 80. Skipping that process is itself a common basis for a 
successful employment dispute Saudi Arabia courts will rule in the employee's favor.
What Can Employees Claim After Unfair Dismissal?
An employee who has been dismissed without a valid reason can generally claim several 
entitlements at once, not just one:
● End-of-service benefits (EOSB) calculated under Article 84
● Article 77 compensation for the unlawful termination itself
● Outstanding wages for any period already worked but unpaid
● Payment in lieu of notice if the required notice period was not given or honored
● Unused annual leave, paid out at the final wage rate
● A service/experience certificate, which employers are required to issue
End-of-Service Benefits (EOSB)
EOSB is a separate entitlement from unfair-dismissal compensation and is owed regardless of 
why the contract ended, subject to the resignation reductions under Article 85. When the 
employer terminates the contract, the full Article 84 formula applies:
Years of Service EOSB Accrual Rate
First 5 years Half a month's wage per year of service
Each year beyond One full month's wage per year of 
5 service
Partial year Prorated proportionally
Source: Saudi Labor Law, Article 84; Ministry of Human Resources and Social Development.
The "wage" used for this calculation is the employee's actual last wage basic salary plus fixed, 
regular allowances such as housing and transport, not basic salary alone.
Example: An employee with a last actual wage of SAR 8,000 who is terminated after 7 years of 
service would be entitled to: (8,000 ÷ 2 × 5) + (8,000 × 2) = SAR 20,000 + SAR 16,000 = SAR 
36,000 in EOSB, before any Article 77 compensation is added.
Article 77 Compensation for Unfair Dismissal
This is the compensation specific to wrongful termination compensation Saudi Arabia law 
provides on top of EOSB, and it applies when the termination itself lacked a lawful reason:
Contract Type Compensation Under Article 77
Indefinite-term contract 15 days' wage for each year of service
Fixed-term contract Wage for the remaining term of the contract
Either case Never less than two months' wage, even for short 
service
Source: Saudi Labor Law, Article 77; Bureau of Experts at the Council of Ministers.
Saudi labor courts do not apply Article 77 automatically or mechanically. The court examines the 
specific facts, the contract terms, the employer's stated reason, the evidence on both sides, and 
whether due process was followed before setting the final figure. The two-months'-wage 
minimum is a floor, not the typical award, and courts have discretion to go higher based on  
years of service and the circumstances of the dismissal.
How to File a Labor Complaint in Saudi Arabia
Employees who believe they have been dismissed unfairly do not go straight to court. The 
Saudi system channels disputes through a structured, mostly digital process:
1. Gather your documents. Employment contract (the Qiwa-registered version carries the 
most weight), payslips, the termination notice or written record of the dismissal 
date, GOSI records, and any correspondence relevant to the dispute.
2. File through Qiwa. Log in to qiwa.sa using your Absher/Nafath credentials and submit a 
labor dispute request describing the issue and attaching your evidence.
3. Amicable settlement window. The Ministry of Human Resources and Social 
Development (MHRSD) opens a mandatory settlement period commonly around three 
weeks during which it attempts to mediate a resolution between employee and employer.
4. Automatic referral to the Labor Court. If no settlement is reached, the case is 
referred to the Labor Court electronically; a fresh complaint does not need to be 
filed separately.
5. Hearing and judgment. Both parties present evidence at the Labor Court, which issues 
a binding, enforceable ruling typically within a few months, depending on case 
complexity.
A claim generally must be filed within a limited window after the employment relationship ends, 
so acting promptly protects an employee's ability to recover what is owed. An employment 
dispute Saudi Arabia lawyer can help calculate the claim accurately before filing, which 
materially affects the strength of the case at the settlement and court stages.
Key Takeaways
● Unfair dismissal in Saudi Arabia means termination without a valid Article 80 ground or 
without following the required process.
● Employees can typically claim EOSB, Article 77 compensation, unpaid wages, notice 
pay, and unused leave, not just one of these.
● Article 77 compensation is never less than two months' wages, and courts decide the 
final amount case by case.
● Labor disputes start with a Qiwa complaint and a mandatory settlement period before 
any court hearing.
● Acting quickly and documenting everything contract, payslips, correspondence 
significantly strengthens a claim.
Conclusion
Saudi Labor Law gives employees real, enforceable protection against arbitrary termination, but 
claiming that protection depends on understanding exactly what the law allows an employer to 
do and what it doesn't. If you believe your employment termination Saudi Arabia experienced 
was unlawful, the compensation you're entitled to often goes well beyond a single payment.
ABF Law Firm's employment team in Riyadh advises employees and employers across the 
Kingdom on termination disputes, EOSB calculations, and representation before the Labor 
Courts. Speak with our employment lawyers to review your case before your filing window 
closes.
Frequently Asked Questions
1. What is unfair dismissal in Saudi Arabia?
It is the termination of an employment contract by an employer without a valid reason 
recognized under Saudi Labor Law, most commonly outside the specific misconduct grounds 
listed in Article 80.
2. Can an employee challenge termination in Saudi Arabia?
Yes. An employee can file a labor dispute through the Qiwa platform, which triggers a 
mandatory settlement attempt with MHRSD and, if unresolved, an automatic referral to 
the Labor Court.
3. What compensation can an employee claim for wrongful termination?
An employee can generally claim end-of-service benefits, Article 77 compensation (at least two 
months' wages), outstanding wages, notice-period pay, and unused annual leave.
4. Can an employer terminate an employee without notice in Saudi Arabia?
Only under the specific grounds listed in Article 80, such as serious misconduct, assault, or 
unexcused absence beyond the statutory threshold, and only after following the required 
disciplinary process.
5. What are an employee's rights after termination in Saudi Arabia?
Employees retain the right to their EOSB, any unpaid wages and leave, a service certificate, 
and where the termination was unlawful additional Article 77 compensation.
6. How can I file a labor complaint in Saudi Arabia?
File the complaint through the Qiwa platform using Absher/Nafath login, attach supporting 
documents, and go through the mandatory amicable settlement period before the case 
proceeds to the Labor Court if needed.
7. How do I challenge wrongful termination in Saudi Arabia?
Preserve your contract, payslips, and any communications, file a Qiwa complaint promptly after 
your contract ends, and consider engaging an employment lawyer before the settlement stage 
begins.
8. What happens if an employer violates Saudi Labor Law?
The employer may be ordered by the Labor Court to pay compensation, outstanding wages, 
EOSB, and other entitlements, and repeated violations can affect the company's standing with 
MHRSD, including Nitaqat compliance.
9. How is compensation for wrongful termination calculated in Saudi Arabia?
For indefinite contracts, Article 77 compensation is generally 15 days' wage per year of service; 
for fixed-term contracts, it is the wage for the remaining contract term with a two-month 
minimum in either case, subject to the court's discretion.
10. Can an employee sue an employer for unfair dismissal?
Yes, through the Labor Court, after the mandatory Qiwa/MHRSD settlement process has 
been completed without resolution.