Saudi Arabia: Foreign Engineer Receives SR1.9 Million Compensation For Unlawful Termination

Gulf Insider

06-03-2025

The Labor Appeal Court in Jeddah upheld the ruling of a labor court obligating a foreign company to pay compensation amounting to SR1.9 million to an Egyptian engineer for the illegal termination of his employment contract. The company complied with the ruling and deposited the amount in the employee's account last week, Okaz/Saudi Gazette has learnt.
The court ruling included payment of the amount representing his entire contract for six years, including compensation for the illegal termination, end-of-service bonus, vacation allowance, the quarterly bonus stipulated in the contract, and late wages, in addition to handing him a certificate of 'clean service' for the past 8 years.
According to the lawsuit, a few years ago, the Egyptian employee signed a contract with a large company for a period of six years. The first period ended and the contract was renewed under the same conditions for a similar period of another 6 years starting in 2021 and ending in 2027. However, the company terminated his services after 4 months, and that means that he had 5 years and 8 months remaining in the contract.
The employee said in his petition that he was demanding compensation for the remainder of the contract period and obtained a preliminary ruling for an amount less than what he had demanded, which prompted him to object to the ruling before the Labor Appeal Court. The employee's lawyer submitted a memorandum of objection in which he said that the Labor Court circuit had made a mistake in calculating the amount due to him since his contract period was 6 years and only 4 months had passed. He demanded that the company be obligated to pay him all his dues for the remaining period of his contract.
In contrast, the company representative insisted that the contract was intended for a period of one year, not six years, but the option was not present on the Qiwa platform and the General Organization for Social Insurance(GOSI) platform. Accordingly, the added contract and the one stated in it (for a similar period) meant one year. Hence, the remaining period of the employee's contract is 8 months, not 5 years and 8 months. The company representative requested that the contract stipulated for 6 years not be considered and that the contract stipulated for one year be approved.
After examining the case, the Court of Appeal concluded that the termination was for an unlawful reason, and that the employee is entitled to compensation for the termination of the six-year contract as stipulated in the agreement. The court ruled that the company must pay compensation for the entire remaining period of the six-year contract.