Article 77 and Unlawful Termin...

In the context of the protection and guarantees provided by the Kingdom of Saudi Arabia to workers in the labor market, Article 77 of the Saudi Labor Law regulates compensation for workers in the event of unjust termination of their contracts. When the contract does not include specific compensation for this scenario, the aggrieved party is entitled to compensation according to the referred article.

What is Article 77 of Saudi labor law? 

Firstly, the first clause of article 77 of Saudi labor law states that if a worker's contract is terminated unjustly and is unspecified in duration, they are entitled to compensation equivalent to fifteen days of basic salary for each year of service. This provision ensures fair compensation reflecting the duration of the worker's service with the employer.

Secondly, if the supposed contract has a specified duration, t. In that case, the second clause stipulates that the worker is entitled to compensation for the remaining period of the contract if it is terminated without legal justification. This means that if the contract is terminated prematurely, the worker deserves compensation equivalent to the remaining duration of the contract.

Thirdly, the third clause requires that the compensation received by the worker under the previous two clauses should not be less than two months' salary. This reflects the commitment to ensuring adequate compensation to cover the worker's needs after losing the opportunity for employment due to unjust termination.

In summary, Article 77 of the Saudi Labor Law represents an important step towards protecting workers' rights and providing fair compensation in the event of unjust termination of contracts. These provisions demonstrate the Kingdom's commitment to applying standards of justice and equality in the labor market, enhancing workers' confidence in the legal system and institutions working to protect their rights.

When Does Article 77 Apply?

Article 77 applies in cases where an employee is dismissed without a justified reason, such as:

Termination without a valid performance issue.

Dismissal due to employer restructuring.

Arbitrary contract termination.

However, it does not apply if the termination falls under Article 80, which lists justified reasons for dismissal, such as misconduct or negligence.

Compensation Under Article 77

How Compensation is Calculated

The compensation an employee receives under Article 77 is based on the following rules:

For fixed-term contracts: The employee is entitled to the full salary for the remaining contract period.

For indefinite contracts: Compensation is calculated as 15 days' salary for each year of service, with a minimum compensation of two months' salary.

Fixed-Term vs. Indefinite Contracts

Employees under fixed-term contracts may receive higher compensation if terminated before the contract’s expiry.

Employees under indefinite contracts receive compensation based on their years of service.

Employee Rights Under Article 77

Employees who are terminated unfairly under Article 77 have the right to:

Receive financial compensation as per the law.

File a complaint with the Ministry of Human Resources and Social Development.

Seek legal assistance if their employer refuses to comply.

Employer Responsibilities and Compliance

Employers must:

Follow the legal procedures when terminating employees.

Provide proper compensation as required by Article 77.

Avoid arbitrary dismissals to prevent legal disputes and penalties.

How to File a Complaint for Unjust Termination

If an employee is dismissed unfairly under Article 77, they can:

1. Submit a complaint through the Ministry of Human Resources and Social Development’s online portal.
2. Provide evidence of unjust termination.
3. Attend mediation sessions with the employer.
4. Pursue legal action if no settlement is reached.