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Employee Release Agreement Template for Saudi Arabia

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Employee Release Agreement

"I need an Employee Release Agreement under Saudi law for a standard employment termination effective March 1, 2025, including basic end-of-service benefits and confidentiality provisions for a mid-level manager in our Riyadh office."

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What is a Employee Release Agreement?

The Employee Release Agreement is a crucial document used in Saudi Arabia when formally terminating an employment relationship by mutual agreement. It serves as a comprehensive record of the termination terms, ensuring compliance with Saudi Labor Law and MHRSD regulations. This document is typically used when employment ends amicably and both parties wish to document their agreement regarding final settlements, including end-of-service benefits, outstanding payments, and mutual releases. It protects both employer and employee by clearly stating all obligations, payments, and releases, while ensuring adherence to mandatory local law requirements. The agreement is particularly important in Saudi Arabia due to specific local labor law requirements regarding termination, settlement calculations, and the need for clear documentation of employment endings.

What sections should be included in a Employee Release Agreement?

1. Parties: Identification of the employer and employee, including full legal names, addresses, and relevant identification numbers

2. Background: Brief history of the employment relationship, including start date, position, and reason for termination

3. Definitions: Key terms used throughout the agreement, including defined terms from Saudi Labor Law

4. Termination Date: Clear specification of the effective date of employment termination

5. Settlement Amount: Detailed breakdown of all payments, including salary, end-of-service benefits, and other entitlements

6. Employee Acknowledgments: Employee's confirmation of receiving all entitlements and benefits

7. Release and Waiver: Mutual release of claims and liabilities, crafted in compliance with Saudi law

8. Return of Company Property: Requirements for returning company assets, documents, and data

9. Confidentiality: Ongoing obligations regarding confidential information

10. Governing Law: Confirmation of Saudi law as governing law and jurisdiction

11. Language: Specification of prevailing language if agreement is bilingual

What sections are optional to include in a Employee Release Agreement?

1. Non-Compete Obligations: Include when the employee is bound by post-employment competition restrictions

2. Continuing Benefits: Used when certain benefits continue post-employment (e.g., health insurance extension)

3. Reference Provision: Include when parties agree on the nature of employment references

4. Intellectual Property Rights: Include for employees who created IP during employment

5. Social Media Handover: Include for employees who managed company social media accounts

6. Training Cost Recovery: Include if there are outstanding training costs to be addressed

7. Severance Package: Include when additional severance beyond statutory requirements is offered

8. Dispute Resolution: Include specific dispute resolution procedures beyond standard court jurisdiction

What schedules should be included in a Employee Release Agreement?

1. Schedule 1 - Payment Calculation: Detailed breakdown of all payment components including end-of-service benefits calculation

2. Schedule 2 - Company Property List: Itemized list of company property to be returned

3. Schedule 3 - Continuing Obligations: Detailed list of surviving obligations post-termination

4. Appendix A - Handover Checklist: Checklist of tasks and items to be completed before final clearance

5. Appendix B - Benefits Summary: Summary of any continuing benefits or special arrangements

6. Appendix C - Non-Compete Terms: Detailed terms of any non-compete restrictions and their geographical scope

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok成人版 | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

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Relevant Industries

Banking & Financial Services

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Relevant Teams

Human Resources

Legal

Compliance

Employee Relations

Personnel Administration

Compensation & Benefits

HR Operations

Corporate Governance

Risk Management

Senior Management

Relevant Roles

Human Resources Director

HR Manager

Legal Counsel

Compliance Officer

HR Business Partner

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HR Operations Manager

Chief Human Resources Officer

Personnel Manager

Compensation & Benefits Manager

Employee Relations Manager

HR Administrator

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HR Specialist

Industries








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Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks, 聽Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination, 聽Severance Pay, Governing Law, Entire Agreemen

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