A Professional View on Article 77 of the Saudi Labor Law: Between Compensation and Worker Protection

Introduction Article 77 of the Saudi Labor Law is among the most debated provisions in recent years due to its direct impact on the termination of employment, particularly in cases of unlawful dismissal. While the Article provides monetary compensation as the primary legal remedy, many stakeholders believe this approach may not sufficiently protect workers and that policy refinements could enhance job stability and curb terminations without a legitimate cause. The Current Legal Framework: Where Does Article 77 Stand? - Article 77 grants compensation to the aggrieved party when a contract is terminated for an unlawful reason, according to the parties’ agreement; in the absence of a contractual clause, statutory formulas apply based on the contract type. - This is complemented by other provisions, such as Article 80, which permits termination without end-of-service benefits or compensation in defined and serious cases (e.g., assault, gross misconduct, excessive absenteeism under set cond