Employee Termination for Misconduct Template (Article 80, Saudi Labor Law)

Dismissing an employee for misconduct is not a routine administrative decision. It is a strict legal procedure governed by Article 80 of the Saudi Labor Law, and any flaw in documenting or executing it can convert a lawful termination into an arbitrary one, exposing the employer to compensation that may exceed 15 months of salary, plus the full end-of-service benefit and notice-period wages. Many establishments in Riyadh, Jeddah, and Dammam lose labor cases not because the employee is innocent, but because management failed to document the violation in the form the Labor Office and the Labor Court will accept.

An employee who commits a gross violation (assault, forgery, disclosure of secrets, prolonged absence, working under the influence of drugs) cannot be dismissed by a verbal decision from a direct manager. The law mandates a sequence of steps: a written investigation, hearing the employee’s statements, graduated warnings where applicable, a reasoned and signed termination decision, notifying the Labor Office, and settling the remaining entitlements. Missing any link in this chain forfeits the employer’s right to apply Article 80 and shifts the case to Article 77 (arbitrary dismissal) or Article 75 (termination without justification).

This template gives you a practical, labor-law-compliant reference for documenting a termination for misconduct: from the investigation file to the statement-hearing minutes, to the final termination decision and clearance form. Every section is built on the text of Article 80 and related provisions (Article 71 on contract termination, Article 84 on end-of-service benefit, Article 87 on cases where entitlement is reduced), with ready-to-fill forms covering the establishment name, employee details, and the specifics of the violation.

When You Can Terminate an Employee for Misconduct Without End-of-Service Benefit

The general rule under the Saudi Labor Law is that the end-of-service benefit is a vested right earned by the employee after completing a specified period of service. Article 80, however, lays out an exception: nine cases in which this right is forfeited fully or partially, and the employer may terminate the employee without notice, without benefit, and without compensation. These cases are not elastic and cannot be expanded by analogy. They are listed exhaustively in the statute, and the Labor Court interprets them narrowly in favor of the weaker party, the employee.

Core Conditions for Applying Article 80

The occurrence of a violation alone is not enough to trigger summary dismissal. Three conditions must be met together:

• The violation actually occurred: the incident must be established by acceptable material evidence (witnesses, video, records, official reports), not by mere suspicion or hearsay.
• The employee was given a chance to defend themselves: Article 80 explicitly requires that no termination take place until the employee has been heard and allowed to defend themselves. This is a substantive condition that cannot be waived.
• A 15-working-day window from the employer’s date of knowledge: if the employer becomes aware of the violation and remains silent for more than 15 working days, they are deemed to have waived the right to dismiss based on that specific violation.

Full vs. Partial Forfeiture of the End-of-Service Benefit

Article 80 forfeits the full end-of-service benefit when applied, but Article 87 carves out an important exception: if the employee has completed 5 or more years of service, they retain half of the benefit even when Article 80 is invoked. This point escapes many employers, who assume that termination for misconduct means losing all entitlements, only to face a later dispute over this remaining half.

Legal Framework: Article 80 of the Saudi Labor Law (The Nine Cases)

Article 80 of the Saudi Labor Law, issued by Royal Decree M/51 and its subsequent amendments, restricts termination without notice and without benefit to nine cases. Any violation outside this list cannot be handled by summary dismissal; instead, it must be addressed through the graduated disciplinary measures (warning, deduction, suspension) set out in the work regulations approved by the Ministry of Human Resources and Social Development.

A Practical Reading of the Cases

Cases 1, 3, 4, 5, 8, and 9 require conclusive evidence and often warrant a parallel report to the Public Prosecution, since the underlying acts are criminalized. Cases 2 and 7 are the most common in labor disputes and fail in roughly 60% of lawsuits because employers do not document the warnings correctly or do not precisely meet the 15-day or 30-day thresholds. Case 6 (probation) has its own separate rules, which we will cover in a later section.

The Difference Between Disciplinary, Administrative, and Arbitrary Dismissal

Confusing the three types of dismissal is the leading reason employers lose in the Labor Courts. Each type has a different legal basis, different procedures, and different entitlements. You cannot mix grounds in a single decision, nor apply the procedures of one type to another.

Disciplinary Dismissal for Misconduct (Article 80)

This is the main subject of this template. It is based on the employee committing one of the nine gross violations. The employee is not entitled to end-of-service benefit (with the Article 87 exception), notice wages, or any compensation. They are, however, entitled to: salary for days actually worked, the cash value of unused annual leave, an experience certificate, and a clearance form.

Administrative Dismissal for Legitimate Reasons (Articles 74 and 75)

This is termination for non-behavioral reasons: restructuring, role elimination, expiry of a fixed-term contract. Here the employee receives full entitlements: full end-of-service benefit, 60 days of notice (for indefinite-term contracts) or pay in lieu of notice, leave balance, and a return ticket for non-Saudi employees.

Arbitrary Dismissal (Article 77)

This is termination without a legitimate reason, or for a reason that falls neither within the nine cases of Article 80 nor within objective economic grounds. In addition to full entitlements, the employee is owed extra compensation of no less than 15 days’ wages for each year of service (for indefinite-term contracts), or the remainder of the term for fixed-term contracts, with a minimum of two months.

Mandatory Procedures Before a Termination Decision

Before issuing a termination for misconduct, the case must pass through a sequence of procedural steps. Skipping any step invalidates the decision legally, even if the violation is proven beyond doubt. These procedures are not formalities; they are a fundamental safeguard of the employee’s right to defense.

Graduated Warnings: When Are They Required?

For graduated-conduct cases (Case 2: failure to perform duties; Case 7: absence), the law requires a graduated penalty path before dismissal: verbal caution, first warning, second warning, final warning, then termination. For the gross cases (1, 3, 4, 5, 8, 9) no prior warning is needed because the act itself destroys trust immediately.

Forming the Investigation Committee

• Number of members: at least 3, one from outside the employee’s own department to ensure neutrality.
• Powers: summoning the employee, requesting documents, hearing witnesses, reviewing attendance logs and CCTV footage.
• Neutrality: no committee member may be a party to the incident (for example the assault victim). Otherwise the investigation is invalidated.
• Confidentiality: investigation minutes are confidential until the final decision is issued, and are not circulated outside the committee and HR.

Components of a Complete Termination Decision

A termination decision is not a short letter telling the employee “you are dismissed.” It is a tightly drafted legal document that will later be presented to the Labor Court as proof of the lawfulness of the termination. If any essential element is missing, the court will treat the dismissal as arbitrary, no matter how strong the underlying evidence.

Drafting the Incident Precisely

Labor Courts overturn termination decisions that use vague phrases like “bad conduct” or “repeated negligence” without detail. Correct drafting names: the Gregorian date, the exact time, the location, the parties, the specific act committed by the employee, the resulting impact, the violation number in the work regulations, and the relevant sub-clause of Article 80.

Avoiding Contradiction Between Stated Grounds

A common mistake: stating one reason in the termination letter (for example, absence), then in court the employer changes the reason (for example, assault). That change alone invalidates the decision. The reason recorded in the decision is the only reason you can defend in court, so make sure it is the real and only reason.

Legally Admissible Evidence

Evidence in misconduct termination cases is governed by the Saudi Evidence Law and the Labor Court regulations. Not every piece of evidence management produces will be accepted, and not everything that looks damning carries weight before the judge. Knowing these categories lets you gather evidence at the moment of the incident, not after the window closes.

Written Records and Documents

• Attendance and check-out records: fingerprint, magnetic card, facial recognition apps. Accepted as proof of absence or lateness when tied to an officially adopted system, ideally exported with a time stamp.
• Emails and official correspondence: accepted when sent from an official work email by an employee authorized to use it. A screenshot alone is not enough; a formal export from the mail server is required.
• Financial and management reports: audited reports from a certified accountant or internal auditor showing the financial damage for Cases 4 and 8.
• Meeting minutes: prove earlier verbal warnings; they must be signed by the attendees, including the employee.

Visual and Audio Evidence

• CCTV recordings: accepted if cameras are installed in publicly used areas of the establishment with visible notices (“Under Surveillance”), and stored with a tamper-proof time stamp.
• Audio recordings: contested. Accepted if recorded with the parties’ knowledge or in an official meeting announced as recorded. Covert recording can open the door to a counter-claim against the employer.
• WhatsApp and Telegram screenshots: require additional authentication (sender and recipient screens, visible phone number, date and time). Notarization before a notary public is preferred.

Witness Testimony

• Number of witnesses: at least two independent witnesses for each incident. A single witness may be admitted but carries little weight before the court.
• Witness independence: the testimony of an employee with a direct relationship to the manager, or with a prior dispute with the employee in question, is weakened.
• Written signature: witness testimony must be documented in writing with signature and date, and the witness must be ready to confirm it before the Labor Court if required.

Official Government Reports

• Police reports: in cases of assault or theft, a police report is very strong evidence before the Labor Court.
• Civil Defense reports: for incidents of gross negligence that cause damage to the establishment.
• ZATCA reports: where the employee has committed tax violations in the establishment’s name, the Zakat, Tax and Customs Authority (ZATCA) report is used as evidence.
• GOSI reports: reveal absence from work or double registration with another employer without your knowledge.

The Employee’s Rights After Termination

Termination for misconduct forfeits some of the employee’s rights but not all of them. The employer remains obligated to hand over a series of documents and entitlements, even if the termination is disciplinary. Sloppiness here opens the door to a separate labor case against you, independent of the dismissal case itself.

The Clearance Form and Its Supporting Documents

The clearance form is a document confirming that the employee has returned all establishment property (laptop, phone, car, keys, access badge, customer files, records) and has no outstanding financial or material obligations. It should be issued within a week of termination and signed by both the employee and a management representative. If the employee refuses to sign, a minute is drawn up in the presence of two witnesses.

Experience Certificate

Article 64 of the Saudi Labor Law obliges the employer to provide the employee with a free experience certificate stating: hire date, leaving date, last position, and last salary. The certificate must not state the reason for termination or any negative remarks. A certificate that includes a negative reason is a violation and entitles the employee to compensation.

Transferring GOSI Subscription and Stopping Qiwa Services

• Closing the relationship on Qiwa: the employer must end the employee’s contract on the Qiwa platform within 14 days of the termination date, or the legal and financial responsibility continues.
• Updating GOSI: stop the subscription on the employee’s last actual working day to avoid accumulating phantom contributions that would be counted against the employee when moving to a new job.
• Exit visa: for non-Saudi employees, the employer must transfer sponsorship or issue a final exit visa within the statutory period.
• Return ticket: if the employment contract provides for a return ticket, it remains due even in disciplinary termination cases (unless the cause is one in which the contract expressly forfeits this right).

End-of-Service Benefit in Cases of Termination for Misconduct

The general rule: Article 80 forfeits the full end-of-service benefit. That rule, however, is qualified by Article 87, which preserves half of the benefit for long-serving employees. Understanding this equation protects you from later disputes and lets you draft a precise financial settlement at the time of termination.

The Base Rule (Article 84)

Article 84 sets the end-of-service benefit as follows: half a month’s wage for each of the first five years, and one full month for each subsequent year. It is computed on the last comprehensive wage (basic salary + fixed allowances + housing + transport if part of the contractual salary). Under Article 80, this amount is forfeited in principle.

The Article 87 Exception

Article 87 provides that if the employee has served five years or more and the contract ends under Article 80, they are entitled to half of the end-of-service benefit calculated under Article 84. This exception is often overlooked in the final settlement, leading the employee to file a later complaint and easily win this remaining half.

Worked Example

An employee worked 7 years at an establishment in Riyadh, with a last comprehensive salary of SAR 12,000. If terminated under Article 75 (ordinary termination), they would be entitled to: (5 x 6,000) + (2 x 12,000) = 30,000 + 24,000 = SAR 54,000 as a full benefit. If terminated under Article 80 after more than 5 years of service, they are entitled to half: SAR 27,000 under Article 87. If their service is less than 5 years, they receive nothing.

Other Entitlements Independent of the Benefit

• Salary for days worked: paid for the days the employee worked from the start of the month up to the day of termination.
• Annual leave balance: the remaining leave balance is calculated and paid out in cash, even in disciplinary termination.
• Approved overtime: overtime pay for previously approved hours that have not yet been disbursed.
• Earned commissions and incentives: commissions on deals closed before the termination date that vested under the internal commission policy.

The Complaints Platform, the Labor Office, and the Labor Court

If the employee files a complaint, the case moves through three formal stages. Knowing each stage and its timing helps you build a strong defense and avoid missing the amicable settlement window that can save substantial time and money.

Stage One: The Labor Complaints Platform

The employee first files the complaint through the labor complaints platform of the Ministry of Human Resources and Social Development, providing: employer details, hire date, termination date, reason for the complaint, and the entitlements claimed. The complaint is routed to the Labor Office in the region (Riyadh, Jeddah, Dammam, Khobar) covering the establishment’s location.

Stage Two: The Labor Office

The Labor Office summons both parties to amicable settlement sessions within 21 working days. The goal is to reach an agreement that avoids court. If the parties agree, a legally binding settlement minute is drawn up. If they do not, the case is automatically referred to the Labor Court with the supervisor’s report on how the sessions went.

Stage Three: The Labor Court

• First-instance circuit: hears the case and issues a ruling after hearing the parties, examining the evidence, and listening to witnesses. Typically takes between 3 and 8 sessions.
• Appeal: either party has the right to appeal within 30 days of the ruling date.
• Enforcement: a final Labor Court ruling is directly enforceable through the Enforcement Court, including freezing the establishment’s bank accounts.
• Statute of limitations: the employee’s right to file a complaint lapses 12 months after the end of the contractual relationship.

Amicable Settlement and Why It May Be the Better Path

Even with a strong legal position, an amicable settlement at the Labor Office is often cheaper than litigating: no attorney fees, no managers tied up in monthly hearings, no exposure to an adverse ruling due to documentation gaps. A professional employer prices each option carefully and negotiates where negotiation pays off, while standing firm where the legal position is solid.

Termination During the Probation Period (90 Days)

Case 6 of Article 80 allows the employer to end the employee’s contract during the probation period without benefit and without stating reasons, but under specific conditions that are no less precise than the rest of the cases. Many establishments believe that “probation” means absolute freedom, and this misunderstanding costs them arbitrary-termination claims.

Conditions for a Valid Probation Period

• Explicit clause in the contract: the probation period must be stated in writing in the employment contract, with its duration precisely defined. Absence of this clause means there is no probation period at all.
• Maximum 90 days: the probation period may not exceed 90 days. If extended, the combined duration cannot exceed 180 days, and only under strict statutory conditions.
• Excluding leave: annual leave days and sick leave days do not count toward the probation period.
• No repetition: an employee cannot be placed on probation twice with the same employer for the same job, unless two years have passed since the previous contractual relationship ended.

The Employee’s Rights During Probation

An employee on probation is a full-rights employee: full salary, active health insurance, GOSI subscription, accruing annual leave. The only difference is that either party may terminate the contract without notice and without compensation at any point during this period. If the 90 days expire without termination, the contract automatically becomes a full contract on the same terms.

Common Mistakes During Probation

• Terminating one day after the period ends: if the employee is dismissed on day 91, it counts as arbitrary termination and the employee is entitled to full Article 77 compensation.
• Failing to establish the start date: if the start of the probation period is not precisely defined in the contract, the judge counts it from the actual first day of work, sometimes in the employee’s favor.
• Applying probation to a fixed-term contract: a fixed-term contract may not be subject to probation unless the contract expressly provides for it and the overall contract duration is long enough.

The Most Common Mistakes That Render a Dismissal Arbitrary

Five mistakes recur in 80% of the termination cases that establishments lose at the Labor Court. Avoiding them lifts your win rate from roughly 30% to roughly 90%.

Verbal Termination Without a Written Decision

The manager who says “you are done with the company” without a written decision loses the case instantly. Even if the reason is sound, the absence of a written decision tells the court that the dismissal happened outside any formal procedure, and is therefore arbitrary. The rule: no termination without a decision, no decision without signature, seal, and date.

Exceeding the 15-Day Window From Date of Knowledge

Article 80 requires that termination take place within 15 working days of the employer’s knowledge of the violation. If it is established that the manager knew of the incident a month earlier and stayed silent, then later decided to terminate, Article 80 falls away even if the act was gross. Pinpoint the date of knowledge in every investigation document.

Denying the Right to Defense

A termination decision issued without summoning the employee to be heard is invalid no matter how strong the evidence. Even if the employee refuses to attend the hearing, a minute is drawn up documenting the refusal and signed by two witnesses, preserving the establishment’s position.

Mismatch Between the Stated and Actual Reason

Management writes one reason in the termination letter (poor performance) while the actual reason is something else (a personal dispute with the manager). When questioned in court, the contradiction surfaces through colleagues’ testimony and the entire argument collapses. State the real and only reason, or state nothing.

Failure to Apply Graduated Penalties in Non-Gross Cases

In cases of absence and failure to perform duties, a chain of warnings must be established (documented verbal warning, first written warning, final written warning) before the termination decision. Jumping from two days of absence straight to dismissal causes the court to treat the decision as disproportionate to the violation.

How Qoyod Helps You Document Performance, Attendance, and Entitlements for Legal Protection

Regular electronic documentation is the difference between a winning case and a losing one. Qoyod gives you a unified environment for HR and accounting, so every action on the employee file is recorded with a tamper-proof time stamp, ready to be exported the moment a dispute arises.

Documented Attendance and Check-Out Log

Qoyod ties the fingerprint attendance system directly to the employee’s record, showing each day: clock-in time, clock-out time, approved leave, and unjustified absence. This log can be exported as an official report with system seal and date, and is admissible before the Labor Office as conclusive evidence of Case 7 under Article 80 (absence).

Warnings and Violations Log

Through the HR and payroll module in Qoyod, every HR document is stored in the employee’s electronic file: first warning, second warning, final warning, investigation reports, disciplinary decisions. Each document carries the upload date and time and the signature of the authorized user. This archive builds the chain of warnings legally required before termination.

Periodic Performance Reports

Quarterly and annual performance reviews are stored in the system with the signatures of both the manager and the employee. If the establishment is litigating a performance-based termination, these reviews are exported as evidence of repeated underperformance and prior improvement attempts.

Precise Calculation of Entitlements and Benefit

• Salary for days worked: the system calculates it automatically from the start of the month to the termination date, including deductions and allowances.
• Leave balance: the accumulated balance is computed at the moment of termination and paid out in cash according to the statutory formula.
• End-of-service benefit: the system applies the Article 84 and Article 87 formulas automatically based on years of service and reason for termination, and produces a complete settlement statement ready for printing and signature by both parties.
• GOSI and Qiwa updates: the system generates the reports needed to close the relationship on the government platforms simultaneously.

Data Confidentiality and Security

HR files in Qoyod are protected with fine-grained role-based access, so only the direct manager, the HR team, and senior management can view the employee file according to the configured permissions. Every change is recorded in an audit log with the user name and the date of the edit. This feature alone can be decisive in disclosure or data-tampering cases.

To review available plans and features, see the pricing page. The Qoyod support team is available 24 hours a day, 7 days a week to help you set up your HR records in line with Saudi Labor Law requirements.

Frequently Asked Questions

Can I terminate an employee the moment I learn of a gross violation, without any investigation?

No. Even in the most serious cases (assault, theft, forgery), the Labor Law requires hearing the employee and allowing a defense before the decision. Immediate termination without investigation invalidates Article 80 and shifts the case to arbitrary dismissal. What you can do is precautionarily suspend the employee on pay for 5 days, extendable, until the investigation is complete. This suspension is not legally treated as a termination.

What if the employee refuses to sign the investigation minutes or the termination decision?

Refusal to sign does not invalidate the procedure. The fix: draw up a minute in the presence of two witnesses employed by the establishment, who attest that the document was presented to the employee and that they refused to sign. The witnesses sign with their full names and ID numbers, and the document is kept in the employee’s file. Before the court, this minute substitutes for the employee’s signature and is treated as a sound legal procedure.

Does an employee terminated under Article 80 still receive an experience certificate?

Yes. The experience certificate is a statutory right of the employee under Article 64 of the Labor Law and is not forfeited by disciplinary dismissal. The certificate states only: start date, end date, last position, and last salary. It must not state the reason for termination or include any negative remarks. If the establishment refuses to issue it or embeds a negative reason, the employee can file a complaint and may obtain financial compensation.

How long do I have between learning of the violation and issuing the termination decision?

15 working days from the employer’s date of knowledge of the violation, under Article 80. Exceeding this window forfeits your right to apply Article 80 to that specific incident, even if it is among the gravest. However, this window does not include the investigation period itself when the incident is complex and requires evidence collection. The key is to document the official start of the investigation within the 15 days, even if the investigation extends beyond.

What do I do if the employee files an arbitrary-dismissal complaint even though the termination was lawful?

Follow the three stages with an organized defense. On the complaints platform, submit your written response within the statutory window. At the Labor Office session, attend with the full investigation file (minutes, warnings, evidence, termination decision). At the Labor Court, bring at least two witnesses and engage a lawyer specialized in labor cases. A file well documented in Qoyod makes this stage highly winnable.

Does Article 80 apply to an employee during the probation period?

Probation has its own rules under Case 6 of Article 80: either party may end the contract during the period without notice and without compensation, provided the period is stated in writing in the contract and does not exceed 90 days (or 180 days in exceptional cases). To terminate an employee during probation, a written contract-termination decision is enough, without needing the full Article 80 investigation procedures. Note: if a gross violation occurs during probation (assault, for example), it is best to document it with a brief investigation minute, in anticipation of any later litigation.

How do I correctly calculate the end-of-service benefit in a misconduct termination?

First, check the years of service. If less than 5 years and Article 80 has been correctly applied, the employee receives no benefit. If 5 years or more, they are entitled to half of the benefit calculated under Article 84 (half a month per year for the first five years, then one month per year thereafter). It is computed on the last comprehensive wage (salary + fixed allowances). Qoyod calculates this formula automatically and produces a complete settlement statement.

Do I need to notify the Labor Office of the termination, and within what time frame?

Yes. You must notify the Ministry of Human Resources and Social Development and close the relationship on the Qiwa platform within 14 days of the termination date. Failing to do so keeps the contractual relationship open on the government platforms, may force you to pay phantom GOSI contributions after the actual termination date, and exposes you to regulatory penalties. Non-Saudi workers also require sponsorship transfer or termination within the statutory period, which is triggered by the formal contract closure.