The Legal Baseline: Notice Period Rules Under Article 75
Before attempting to reduce or waive a notice period, it is essential to understand the statutory defaults enforced by the Saudi Labor Law (Royal Decree No. M/51 as amended) and hard-coded into the Qiwa Contract Management System:
- For employees paid on a monthly basis, the statutory notice period is at least 60 days (Article 75, Paragraph 1).
- For non-monthly employees (daily, weekly, or piece-rate), the statutory notice is at least 30 days.
- Employment contracts can stipulate a longer notice period (e.g., 90 days), but they cannot legally reduce it below the 60-day statutory threshold unless mutually agreed upon at the time of termination.
- Fixed-term contracts expire naturally on their stated end date without requiring an Article 75 notice period, provided non-renewal notices are served according to the contractual terms (typically 30 to 60 days prior to expiry).
- Unilateral early termination of a fixed-term contract outside statutory exceptions exposes the terminating party to damages under Article 77 (wages for the remaining contract duration or minimum 2 months' wage).
When a worker submits a resignation via Qiwa Individuals, the platform automatically calculates the remaining notice period based on the authenticated contract terms and displays a live countdown timer.
Method 1: Mutual Agreement on Qiwa (Electronic Handshake)
The cleanest and most common way to shorten a notice period without monetary claims is mutual written consent executed through the Qiwa portal.
Step-by-Step Portal Workflow
Employee Proposes Earlier Date
Select "Request Reduced Notice" in Qiwa Individuals
Employer Qiwa Business Review
GRO/HR receives electronic alert to accept or reject
Automated MHRSD Execution
Approved: End date shortened
Step 1: Employee Initiates Resignation with Modified Date
Step 2: Employer Review in Qiwa Business
- Accept Reduced Date: Qiwa immediately re-calculates the contract expiry date to the agreed date. The employee's sponsorship transfer or Final Exit eligibility unlocks on that exact date.
- Reject / Maintain Default: The request defaults back to the original statutory 60-day notice period. The employee remains contractually required to serve the balance.
Important Compliance Note: A verbal agreement, text message, or signed internal company paper is not sufficient on its own. If the HR department does not approve the date adjustment directly on Qiwa, the MHRSD system will continue running the 60-day countdown. Leaving before the Qiwa countdown expires without electronic approval exposes the worker to an "Absence from Work" (Inqita' an al-Amal) report.
Method 2: Pay-in-Lieu of Notice (Article 76 Buyout)
If either party refuses to wait out the 60-day notice period and no mutual agreement is reached, Saudi Labor Law provides a financial settlement mechanism under Article 76:
"If the party terminating the contract fails to observe the notice period, it shall pay the other party compensation equal to the worker's wage for the duration of the notice period or the remaining part thereof, unless both parties agree otherwise."
How Buyout Compensation Is Calculated
A frequent point of dispute between HR departments and exiting employees is whether the notice buyout is calculated on the Basic Salary or the Gross (Total) Salary.
Under Article 2 of the Saudi Labor Law, the legal definition of "Wage" (Al-Ajr) includes the basic salary plus all allowances, increments, and recurring benefits (housing, transportation, food, and guaranteed production bonuses). Therefore:
Worked Calculation Scenarios
| Compensation Element | Scenario A: Expat Engineer | Scenario B: Finance Manager | Scenario C: Admin Specialist |
|---|---|---|---|
| Basic Salary | SAR 7,000 | SAR 14,000 | SAR 4,000 |
| Housing Allowance | SAR 1,750 | SAR 3,500 | SAR 1,000 |
| Transport Allowance | SAR 750 | SAR 1,500 | SAR 500 |
| Gross Monthly Wage | SAR 9,500 | SAR 19,000 | SAR 5,500 |
| Daily Wage (Gross / 30) | SAR 316.67 | SAR 633.33 | SAR 183.33 |
| Statutory Notice | 60 Days | 60 Days | 60 Days |
| Days Served | 20 Days | 0 Days (Immediate Exit) | 45 Days |
| Unserved Notice Days | 40 Days | 60 Days | 15 Days |
| Pay-in-Lieu Owed (Article 76) | SAR 12,666.80 | SAR 38,000.00 | SAR 2,749.95 |
Who Pays Whom?
The employee must pay the company the calculated Article 76 compensation, or authorize the company in writing to deduct this amount from their accrued annual leave balance or End of Service Benefits (Article 84).
If an employee resigns with 60 days' notice, but the company tells the employee to stop working immediately for confidentiality or handover reasons, the company must pay the employee their full salary for the entire 60 days as notice compensation, in addition to their complete End of Service settlement.
Method 3: Immediate Exit Without Notice Under Article 81
If your employer has breached their fundamental statutory obligations, you are not legally required to serve a notice period or pay buyout compensation. You can resign immediately under Article 81 of the Saudi Labor Law and retain 100% of your End of Service gratuity.
The 7 Statutory Exceptions Under Article 81
For full step-by-step procedures on executing an Article 81 exit without employer consent, refer to our comprehensive guide on How to Resign in Qiwa Without Kafeel Consent.
Comparison Matrix: Notice Period Reduction Routes
| Parameter | Mutual Qiwa Handshake | Employee Notice Buyout | Employer Notice Waiver | Article 81 Breach Exit |
|---|---|---|---|---|
| Governing Law | Article 74 (Agreement) | Article 76 (Compensation) | Article 76 (Pay-in-Lieu) | Article 81 (Statutory Fault) |
| Notice Days Served | Agreed amount (e.g. 15–30) | 0 to Partial | 0 (Immediate release) | 0 (Immediate release) |
| Financial Settlement | Zero penalty; wages for days worked | Employee pays unserved days | Employer pays full notice wage | Employer pays all dues + ESB |
| End of Service Impact | Standard Article 85 scale | Standard Article 85 scale | Standard Article 85 scale | Full Article 84 (No reduction) |
| Employer Consent Required? | Yes (Via Qiwa Business) | No (If paid in full) | N/A (Employer initiated) | No (MHRSD / Labor Court) |
| Sponsorship Transfer Time | Immediate upon agreed end date | Upon financial clearance | Immediate | Immediate upon MHRSD approval |
Critical Traps to Avoid When Shortening Notice
1. The Verbal Agreement Trap
Never stop reporting to work based solely on a verbal commitment from your HR manager or division head. If the company fails to record the reduced date in the Qiwa Business portal, the MHRSD system treats your absence as an unexcused absence. If unexcused absence exceeds 15 consecutive days or 30 intermittent days in a year, the employer can legally terminate you under Article 80 without End of Service Benefits and without notice.
2. Offsetting Annual Leave Against Notice
Under Saudi labor jurisprudence, an employer cannot force an employee to substitute their remaining statutory notice period with accrued annual leave without mutual written agreement. Similarly, an employee cannot unilaterally decide to take 30 days of leave during a 60-day notice period unless approved by the employer. Any untaken leave balance must be liquidated as cash in the final settlement under Article 111.
3. The Basic vs. Gross Salary Deduction Error
When HR drafts a separation agreement with a notice buyout, ensure the deduction formula matches Article 76. Some employers attempt to deduct more than the gross daily wage or assess arbitrary "recruitment replacement fees." Such deductions are unlawful and invalid before the MHRSD Amicable Settlement (Waddi) committees.
Statutory Timelines for Final Settlement (Article 88)
Once the agreed reduced notice period concludes on Qiwa, strict financial settlement deadlines apply under Article 88:
Failure to settle within these statutory timeframes exposes the employer to administrative fines and penalties under the MHRSD compliance schedule.
Frequently Asked Questions (FAQ)
Can an employer reject my notice period reduction request on Qiwa?
Yes. Under Saudi Labor Law Article 75, both parties are legally bound by the contractual notice period. If you request a reduction via Qiwa and the employer declines or ignores the request, you must complete the full statutory notice period (typically 60 days) to avoid financial liability under Article 76.
Does the notice period still count if my contract has already expired?
No. If your fixed-term contract has expired and was not renewed on Qiwa, you are not subject to a notice period. You are free to transfer your sponsorship to a new employer immediately or request a Final Exit visa without serving notice.
How is a notice period buyout deducted from End of Service Benefits (ESB)?
If you reach an agreement with your employer to leave immediately under Article 76, the gross wage for the unserved days is legally deducted from your accrued final entitlements (accrued salary + annual leave balance + End of Service Benefits). If your total entitlements are insufficient to cover the buyout, you must pay the remaining balance directly to the establishment.
Can I look for another job during the notice period?
Yes. Under Article 78 of the Saudi Labor Law, if the employer gave notice of termination, the worker has the legal right to take one full day off per week or eight hours during the workweek with full pay to search for another job or attend interviews.
What should I do if my employer agrees in writing to shorten the notice but refuses to update Qiwa?
If you have written evidence (such as an email from an authorized HR representative, an official memo on company letterhead, or a signed separation agreement) and the employer refuses to approve the date on Qiwa, file an electronic grievance immediately through the MHRSD portal under the Amicable Settlement (Waddi) service. The labor conciliator will enforce the written agreement and compel the establishment to update Qiwa.
Need Expert Assistance with Qiwa & Labor Disputes?
For corporate compliance assessments, sponsorship transfer facilitation, or labor dispute resolution before MHRSD Amicable Settlement committees, explore our dedicated Qiwa Platform Compliance Hub or contact our compliance specialists for tailored legal guidance.
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Advocate High Court (Punjab Bar Council) and ATT GCC VAT Certified Specialist. Author of comprehensive regulatory commentaries on Saudi corporate law, ZATCA e-invoicing protocols, and Labor Reform Initiatives.