Ending an employment relationship by agreement of both sides, or terminating an employment contract by mutual consent, saves the employee and the employer a great deal of time and avoids a dispute, provided it is written properly: when the contract ends, what is owed, and what each side gives up. Below is a mutual termination of employment template you can copy, with an explanation of what it must include so it does not turn into a dispute later.
Mutual termination of employment agreement template (general form)
Official documents and filings in Saudi Arabia are in Arabic, so the Arabic template below is the one to sign and use, and the Arabic text prevails. An English translation follows it to help you understand and prepare the content.
What to check before signing
| For the employee | For the employer |
|---|---|
| That the amounts are calculated correctly. Try the end-of-service calculator | That the agreement is written and signed, and that the termination is by mutual consent, not a one-sided decision |
| Not to sign a final settlement before actually receiving the money | That the settlement states the specific amounts paid |
| When and how payment will be made | The return of company property and completion of official procedures |
| The service certificate and the transfer of services or final exit | Updating the contract on the official platforms |
Termination by mutual consent differs from resignation and from dismissal in terms of entitlement to the end-of-service award and compensation. Read Article 74, which lists agreement among the ways a contract ends, and Article 77 on unlawful termination.
Frequently asked questions
Am I entitled to the full end-of-service award in a mutual termination?
That depends on how the termination is worded and on what the law and the agreement provide. This is why you should write the amount explicitly in the agreement after calculating it, rather than relying on the phrase "statutory entitlements".
I signed a final settlement but never received the money. What can I do?
Keep your copy and any proof that you were not paid, and claim your rights through a complaint and then the labour court within the period set by law. Read filing a labour lawsuit.
Need a termination agreement reviewed before you sign?
The Usus Law Firm team reviews termination agreements and final settlements for employees and employers as part of its labour cases service, in Riyadh and Tabuk. See also our employment contract template.
This article is general legal information and is not a substitute for advice on your specific case. Court proceedings in Saudi Arabia are in Arabic; the official Arabic text of each law prevails.
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