What does Article 77 say?
If either party ends the contract for a reason that is not valid, the other party is owed compensation, unless the contract sets a specific amount:
Open-ended contract: 15 days' wage for each year of service.
Fixed-term contract: wages for the rest of the contract term.
In both cases, compensation is at least two months' wage.
Example: an employee on an open-ended contract with 7 years of service and a wage of SAR 10,000. The daily wage is 333.33, so compensation is 7 × 15 × 333.33 = SAR 35,000, which is above the minimum (20,000).
Notice period pay
For open-ended contracts, the employer must give written notice before ending the contract, for a period set by the law and the contract (usually 60 days when the employer ends it). If they don't, the employee is owed wages for the notice period. Change the number of days to match your contract.
FAQ
Does Article 77 compensation replace the end-of-service award?
No. It is a separate right paid on top of the end-of-service award and other dues such as unused leave.
What is the minimum compensation?
At least two months' wage, even if the service or the remaining contract term is short.
Which wage is used?
The last actual wage: basic pay plus fixed allowances such as housing and transport.
This is an estimate, and the law can change. A valid reason for dismissal or a compensation clause in the contract changes the result. Check with the Ministry of Human Resources or a lawyer.