Domestic Worker Contract Termination in Saudi Arabia

An employer may need to end a domestic worker’s contract before its agreed expiry date because the worker is unsuitable for the role, contractual obligations have been breached, or circumstances prevent the employment relationship from continuing. A domestic worker may also wish to terminate the contract when their fundamental rights are violated.

However, ending a contract early does not necessarily allow either party to cancel it without consequences. Saudi Arabia’s Domestic Workers and Similar Categories Regulation sets out when contracts may end and when employers or workers may terminate them, while taking account of outstanding rights and compensation.

If you are considering terminating a domestic employment contract, this guide explains the main provisions and steps to understand before making a decision.

What Does Domestic Worker Contract Termination Mean?

Early termination means ending the contractual relationship between an employer and a domestic worker before the contract’s specified expiry date, under circumstances permitted by the regulation or agreed upon by both parties.

Not every ending of an employment relationship is an early termination. A domestic employment contract may expire naturally, end by mutual agreement, or conclude because of another circumstance specified in the regulation.

The regulation requires domestic employment contracts to have a fixed term and to specify their duration, renewal arrangements, and termination procedures.

Before cancelling a contract, identify the reason for ending it. The rights and obligations of each party may vary depending on both the grounds and the method of termination.

When Can a Domestic Employment Contract End?

The regulation identifies several circumstances in which a domestic employment contract may end, including:

• Expiry of the agreed contract term.
• Mutual agreement, provided the domestic worker’s consent is given in writing.
• The death of either party.
• The worker becoming unable to perform the work, as confirmed by an approved medical certificate.
• Either party losing legal capacity, as established by a medical report from an authorized body.
• Force majeure preventing one or both parties from fulfilling the contract.
• The domestic worker reaching the age of 60, unless both parties agree otherwise.

These circumstances differ from termination resulting from a breach of obligations, which may give one party the right to end the contract while retaining their statutory rights.

How Does Early Termination Differ from Other Ways a Contract Ends?

Although these terms are often used interchangeably, the distinction matters when assessing an actual case.

Contract Expiry or Other Grounds for Ending Employment

A contract may end when its agreed term expires or when a circumstance specified in the regulation occurs, such as mutual agreement, force majeure, or another recognized ground.

Termination by Mutual Agreement

Both parties may agree to end the employment relationship, provided the domestic worker gives written consent.

Termination Following a Breach of Obligations

Either party may have grounds to terminate the contract if the other breaches their obligations or if another circumstance specified in the regulation applies.

Termination Before the Agreed Expiry Date

When a contract is ended early, the reason must be assessed to determine whether the termination is lawful. This can affect compensation and the other party’s financial entitlements.

Simply describing an action as “contract cancellation” is therefore insufficient to establish its legal consequences. The reason and procedure both matter.

When Can an Employer Terminate the Contract Without Compensation?

An employer may terminate a domestic employment contract without the worker being entitled to end-of-service benefits or compensation only in the circumstances specified in the regulation. These include:

1. The worker breaching essential obligations under the contract or regulation, or refusing to work without a legitimate reason despite receiving a written warning.
2. The worker deliberately causing material loss to the employer, provided the relevant authorities are notified within 24 hours of the employer becoming aware of the incident.
3. The worker being absent from work, subject to the Ministry’s applicable rules and procedures.
4. Evidence that the worker obtained employment through fraud or deception.
5. Proven misconduct or an act involving dishonesty or a breach of integrity.
6. The worker assaulting the employer or a household member, or engaging in activities that harm them.

Dissatisfaction with a worker’s performance alone is not sufficient to terminate the contract without entitlements or compensation. The grounds must fall within the circumstances permitted by the regulation.

If the issue concerns a refusal to perform assigned duties, review the information on penalties for a domestic worker’s refusal to work before deciding how to proceed.

When Can a Domestic Worker Terminate the Contract?

The regulation also allows domestic workers to terminate their contracts while retaining their statutory rights in certain circumstances, including:

• The employer breaching essential obligations under the contract or regulation.
• Evidence that the worker was deceived about the terms or conditions of employment when the contract was signed.
• The worker suffering a violent assault or indecent conduct by the employer or a household member.
• The worker being assigned dangerous tasks that threaten their health or physical safety.
• The employer hiring out the worker’s services to others.

The right to terminate a domestic employment contract is therefore not limited to employers. Workers also receive legal protection when employers fail to meet their obligations.

Can the Contract Be Terminated During Probation?

Yes. The regulation allows both parties to agree in writing to a probation period of no more than 90 days. During that period, either party may terminate the contract unilaterally.

A domestic worker cannot be placed on probation more than once with the same employer unless both parties agree that the worker will perform a different job from the original role.

This distinction matters when considering termination early in the employment relationship. Understanding the probation period for domestic workers helps clarify how termination during probation differs from termination after it ends.

What Happens When Termination Results from Absence from Work?

A domestic worker’s absence from work is addressed by the rules governing the employment relationship.

The Ministry of Human Resources and Social Development has introduced an initiative that includes a service for terminating contracts because of absence from work, alongside a labor mobility service. These operate under specific conditions intended to protect both parties.

The Ministry has also explained that certain cases involve procedures affecting the worker’s status after an absence report is filed. These may concern final departure or transfer to a new employer, depending on how long the worker has been in Saudi Arabia and the applicable conditions.

Absence should therefore not be treated as grounds for immediate cancellation without following the required official procedures.

Can an Employer End the Contract If the Worker Is No Longer Suitable?

Dissatisfaction with performance does not automatically justify terminating a contract without financial consequences.

If the issue is simply that the worker’s performance does not meet the household’s needs, or the employer wants a replacement, the employer should review the contract and the circumstances. This includes determining whether termination would occur during probation, by mutual agreement, or on another recognized ground.

When considering a replacement, reviewing domestic worker profiles can help compare candidates’ experience and skills with the household’s requirements.

Different consequences may apply where there is a serious breach of obligations, refusal to work without a legitimate reason after a written warning, or another circumstance specified in the regulation.

What Rights Does a Domestic Worker Have When the Contract Ends?

Ending the employment relationship does not automatically remove the worker’s financial entitlements, including end-of-service benefits for domestic workers when the eligibility conditions are met.

The regulation provides for an end-of-service benefit equivalent to one month’s wages for every four consecutive years of service with the same employer, calculated using the worker’s final wage.

Outstanding entitlements must also be settled according to the circumstances in which the contract ended and within the prescribed deadlines.

Before terminating the contract, review:

• Wages owed up to the end of employment.
• End-of-service benefits, where applicable.
• Any other established entitlements.
• Financial obligations arising from the contract.
• Costs payable by each party according to the reason for termination.

Is Compensation Payable for Early Termination?

Compensation may be payable when a contract is terminated without a lawful reason.

The regulation states that, unless the contract specifies compensation for unlawful termination by either party, the other party is entitled to compensation equivalent to two months’ wages.

This highlights the importance of identifying the grounds for termination before taking action. An unlawful termination may create a financial obligation toward the other party.

Who Pays for the Worker’s Return Ticket?

Responsibility for return travel costs depends on why the employment relationship ended.

The regulation identifies circumstances in which the employer must pay for the worker’s return journey. Official guidance also addresses situations in which the worker bears those costs when leaving without a legitimate reason.

Musaned has explained that, where a contract is terminated before its expiry, the employer pays for the worker’s return ticket if the employer terminates it without a lawful reason or the worker terminates it for a lawful reason.

There is therefore no single rule that applies to every case. The grounds for termination must be established first.

What Should You Do Before Cancelling a Domestic Employment Contract?

Before proceeding, review the following points.

1. Review the Employment Contract

Check the contract’s duration, termination provisions, probation period, and each party’s obligations.

2. Identify the Reason for Termination

Has the contract expired? Have both parties agreed to end it? Has either party breached their obligations? Does force majeure apply?

Identifying the reason helps establish the resulting rights and responsibilities.

3. Calculate Outstanding Entitlements

Determine the wages, benefits, and other amounts due before closing the employment relationship.

4. Document the Termination

Where termination is by mutual agreement, record the other party’s consent in the required form. The regulation specifically requires the worker’s written consent in such cases.

5. Use Official Channels

Do not rely solely on verbal agreements or undocumented arrangements. Use the official channels available for managing the employment relationship.

What If You Want to End the Contract Before It Expires?

If the contract remains in force, start by establishing why you want to terminate it.

Where both parties agree, documenting that agreement provides a clear basis for proceeding. If the reason concerns a breach of obligations, confirm that the circumstances meet the applicable requirements before taking action.

Avoid terminating the contract first and trying to resolve the consequences afterward. The method of termination can affect compensation, outstanding entitlements, and return travel costs.

Is an Inability to Pay Wages Grounds for Termination?

An inability to pay wages should not be treated as a simple reason to cancel the contract without considering the worker’s rights.

Paying wages is a fundamental employer obligation. The regulation requires monthly payment through the methods prescribed by the Ministry.

If an employer can no longer afford the ongoing cost of domestic employment, the relationship should be addressed through lawful procedures, with outstanding entitlements settled and the financial consequences of termination understood.

How Are Outstanding Entitlements Settled After Employment Ends?

Settling outstanding amounts is an essential part of ending the employment relationship.

Under the regulation, the employer must pay wages and settle the worker’s entitlements within one week of the contract ending in the specified circumstances. If the domestic worker terminates the contract, all entitlements must be settled within two weeks.

The employer may also deduct a debt owed to them arising from the employment relationship, subject to the applicable rules.

Completing termination therefore involves more than recording the end of employment. It also requires settling the related financial obligations.

What Mistakes Should You Avoid When Terminating the Contract?

The following mistakes can make the process more complicated:

• Ending the contract verbally without documentation.
• Failing to identify the reason for termination.
• Overlooking probation terms.
• Failing to check the contract’s duration.
• Leaving wages or other entitlements unpaid.
• Assuming dissatisfaction alone permits termination without consequences.
• Ignoring the other party’s right to compensation for unlawful termination.
• Failing to follow official procedures when a worker is absent.
• Relying on outdated information instead of official channels.

If you plan to recruit a replacement, base your search for the best recruitment office in Tabuk on clear contracts, suitable candidate recommendations, and consistent follow-up. This can help address the reasons your previous arrangement did not meet your needs.

Contract Expiry and Early Termination: Key Situations

The main situations can be summarized as follows:

• Expiry of the contract term: Employment ends naturally. Outstanding entitlements must still be reviewed and settled.
• Mutual agreement: Both parties agree to end employment, with the worker’s consent documented in writing.
• Probation: Either party may terminate the contract in accordance with the probation conditions.
• A breach by the worker: The employer may terminate the contract in the circumstances permitted by the regulation. The worker’s remaining entitlements depend on the applicable provisions.
• A breach by the employer: The worker may terminate the contract while retaining their statutory rights in the specified circumstances.
• Termination without a lawful reason: Compensation may be payable. The other party may be entitled to two months’ wages unless the contract specifies a different amount.

These situations reflect the provisions described in the Domestic Workers and Similar Categories Regulation.

Frequently Asked Questions

Can a Domestic Employment Contract Be Terminated Before It Expires?

Yes, where permitted by the regulation or by mutual agreement under the applicable conditions. Unlawful termination may entitle the other party to compensation.

Can I Cancel the Contract During Probation?

Yes. If probation was agreed upon in writing and does not exceed 90 days, either party may terminate the contract during that period in accordance with the regulation.

Can the Contract Be Ended by Mutual Agreement?

Yes, provided the domestic worker gives written consent.

Take the Right Steps When Ending a Domestic Employment Contract

Terminating a domestic employment contract creates rights and obligations for both the employer and the worker. Identifying the grounds, reviewing the contract, settling outstanding amounts, and documenting the process all help bring the relationship to a clear and orderly close.

At Alnjoom Recruitment, we help employers choose domestic workers who match their household’s needs from the beginning of the recruitment process, in accordance with approved procedures in Saudi Arabia.

If you are considering recruiting a new domestic worker, contact Alnjoom Recruitment to explore the available options and begin an organized recruitment process.