📋 Fixed-term contracts — special provisions

Under Article 74, when a fixed-term contract expires without renewal, it ends automatically. In this case:

  • ✅ The worker is entitled to full End-of-Service Gratuity under Art. 84
  • ✅ The worker is entitled to compensation for all unused leave
  • ✅ The worker is entitled to any overdue wages
  • ❌ The worker is not entitled to notice pay (Art. 75) because the term ended naturally

🔄 Automatic renewal — an important rule

If both parties continue performing the contract after it expires without a new agreement, the contract is considered renewed for an unlimited term. This means the worker gains the rights of an open-ended contract, including notice pay.

📜 Article 74 — Labor Law: A fixed-term employment contract ends upon the expiry of its term; if both parties continue to perform it, it is considered renewed for an unlimited term.

📊 Example: Reda worked a two-year contract on a salary of SAR 5,000
End-of-Service Gratuity (less than 5 years)5,000 ÷ 2 × 2 = SAR 5,000
Leave compensation (12 days remaining)(5,000÷30) × 12 = SAR 2,000
Total owedSAR 7,000 ✅

💡 If your employer renewed your fixed-term contract several times before ending it, you may be entitled to the rights of an unlimited-term contract. Calculate your situation on Sanad for free.