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End of Service Payment

At the end of a work relation, the employer pays the worker an end-of-service award of 1/2 month wage for each of the 1st 5 years.

Posted on

26 September 2013

Last updated on 27 June 2017
End of Service Payment

LABOR LAW

Royal Decree No. M/51
23 Sha'ban 1426 / 27 September 2005
First Edition
2006


Chapter Four
End-of-Service Award

Article (84): Upon the end of the work relation, the employer shall pay the worker an end-of-service award of a half-month wage for each of the first five years and a one-month wage for each of the following years. The end-of-service award shall be calculated on the basis of the last wage and the worker shall be entitled to an end-of-service award for the portions of the year in proportion to the time spent on the job.

Article (85): If the work relation ends due to the worker’s resignation, he shall, in this case, be entitled to one third of the award after a service of not less than two consecutive years and not more than five years, to two thirds if his service is in excess of five successive years but less than ten years and to the full award if his service amounts to ten or more years.

Article (86): As an exception to the provision of Article (8) of this Law, it may be agreed that the wage used as a basis for calculating the end-of-service award does not include all or some of the commissions, sales percentages, and similar wage components paid to the worker which are by their nature subject to
increase or decrease.

Article (87): As an exception to the provisions of Article (85) of this Law, the worker shall be entitled to the full award if he leaves the work due to a force majeure beyond his control. A female worker shall likewise be entitled to the full award if she ends her contract within six months from the date of her marriage or three months from the date of giving birth.

Article (88): Upon the end of the worker’s service, the employer shall pay his wages and settle his entitlements within a maximum period of one week from the date of the end of the contractual relation. If the worker ends the contract, the employer shall settle all his entitlements within a period not exceeding two weeks. The employer may deduct any work-related debt due to him from the worker’s entitlements.

 
 
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