Saudi Notice Period Rules: Employment and Commercial Leases
Notice periods in Saudi Arabia are governed by different rules depending on whether you are dealing with an employment contract or a commercial lease. Getting it wrong can cost you months of salary or rent. This guide explains the legal requirements for both.
Employment Notice Periods
Under Article 75 of Saudi Labour Law, either party may terminate an indefinite-term contract by providing written notice. The minimum notice period is 60 days for employees paid on a monthly basis and 30 days for all others. These are minimum periods — the contract may specify longer notice.
If the party giving notice fails to observe the notice period, they must compensate the other party for the remaining notice period. This compensation is calculated based on the employee's wage for the unserved notice period. In practice, this means an employer can pay the employee in lieu of notice and terminate immediately.
During the notice period, the employee is entitled to one day off per week (or 8 hours) to search for new employment, with full pay (Article 78). This leave is at the employee's choice of timing, provided they notifies the employer at least one day in advance.
Fixed-Term Contract Termination
Fixed-term contracts do not require notice for termination at the end of the term — they simply expire. However, if either party wants to terminate a fixed-term contract before its natural expiry, they must either have a valid legal ground (Articles 80 or 81) or pay compensation. The compensation for early termination of a fixed-term contract is the remaining salary for the unexpired term, unless the contract specifies a different amount (Article 77). This can be a very expensive exit.
Commercial Lease Notice Periods
Commercial lease notice periods are governed by the terms of the lease contract rather than a specific statute. Most commercial leases in Saudi Arabia require 3 to 6 months' notice before the lease expiry date if the tenant does not wish to renew. Failure to provide notice may result in automatic renewal for another term.
For leases registered on the Ejar platform, the system sends automated reminders before the contract expiry date. However, you should not rely solely on the system — track your notice dates independently and send formal written notice to the landlord in addition to any Ejar platform actions.
Common Mistakes
The most common mistake is assuming that verbal notice is sufficient. Saudi law requires written notice for employment termination to be legally effective. For commercial leases, the contract typically requires notice to be delivered by registered mail or through official channels. Email notice may not satisfy the contractual requirements unless the contract explicitly permits it.