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Penalties for Breach of Contract....???

It has really been frustrating for me to find an answer to a simple question. It is more than a month I have been trying all "KEYWORDS" for an online search to get to the fact. However, it seems to be an uphill task to find clarity on an ambiguity in Saudi Arabian Labor Law.

It struck my mind, today, that may be I was trying wrong options and that is the reason I am writing, as a matter of fact for the first time, on "Expat.com". At least I will know for sure how much help "Expat.com" can be in times of need. Before I pose the question I would quote relevant Clause from the Saudi Arabian Labor Law which is regarding the subject:

"Article 74

If the contract is cancelled for no valid reason, the party who is prejudiced by such cancellation shall be entitled to an indemnity to be assessed by the competent Commission, provided that such assessment shall take into account actual and contingent material and moral prejudice suffered by such party. In the case of the workman, such assessment shall take into account the nature of the work, the period of service, the workman's age, the pay he was receiving, the family burdens he shoulders, the extent to which his income from his new job is lower than the income from his old job, the degree of arbitrariness of the discharge decision, the extent to which this decision affects the workman's reputation, and any other conditions and concomitant circumstances in accordance with the rules of equity and current generally accepted practice."

Now the simple question is:

"How much will I have to pay towards my employer in case I want to resign from my job as a sandwich artist with a fast food chain of restaurants in eastern province?"

The person, who this situation is related to, is not happy and feels depressed with his current role though he reluctantly signed for the same and is into the job for around 5 months.

I hope I find some help from this blog and my anticipated gratitude goes to those who contribute.

Best regards,

Ishfaq Shah

I think it would depend on the company. As for my experience, I was hired as a nurse for a private hospital (Dr. Bakhsh) under a sub-contractor (Al Majal), 2 years contract and I resigned after a year. The cost of my iqama and visa were deducted from my last pay, and I paid for my plane ticket.

Thanks Lina,

How did your employer respond to your resignation? Were they annoyed or they were just fine with it?

Thanks once again

No, they didnt give me a hard time, I left them with a good reputation. I had a valid reason, my daughter needs me back home, she was just 1 yr old that time. The Nursing Director even offered me just to take a vacation and they'll hire me directly when Im back with a higher salary. But I guessed I was not ready for expat life that time, that was in 2002.

As @lina0574 said above, if you want to go for an early termination of your contract, you may have to pay:

1- All expenses on your visa endorsements (if you were brought in from your home country).
2- Air tickets etc
3- Other minor induction charges

Thanks for your inputs.
How much could it in monetary terms? Is there a guideline somewhere which is binding in this regard or is it completely at the discretion of the employer..?

Generally, you won't find guidelines online almost about anything in KSA :), your contract must have a clause addressing early termination.

Here is the back-of-the-envelope calculation:
- 2,000 SAR is the government fee of visa.
- Some service charges, labor card charges -- say 2,000 SAR adding buffers
- Add on top on that the air fare estimate.

TLL is right, no guidelines so meaning to say no standards, they can basically let you pay for every cents that they have spend on you.

I think these amount (pre-recruitment expenses) would help you, for you to have a rough estimate of how much would you pay to the company.

Visa Cost: SR 2000 for 2 years
Iqama Fee: SR 650 for 1 year
Work Permit Fee: SR 2,500 for 1 year
Airfare Charges: (it depends)
Agency Fees: (if any)

The abovementioned amount are being used in our company, I don't know if it applies to your company too. And of course it will be deducted from whatever claims/amount you'll get from your company.

Good luck!

how is your problem now? is it solve already?... How much did you pay? i have also almost the same problem as yours but its not me got this problem but its my husband.


My husband started working in KSA last February 5 2014.. there company have always delayed salary, and the accomodation is not good as it was stated in the contract.. He is planning to be home as he turned 1 year by the next 5 days of this month. He ask from the company if how much is he going to pay if he will not continue the contract of two years, his company told him that he is going to pay 5k SR which cost here in the philippine almost 75 thousand pesos, after 3 days he inquired again and he was told by the company that according to there new guideline, the payments for breach of contract will be increased and it will be 10k SR already or it cost here in Phil for almost 150,000.00 in which i think this is too much.
Is there anybody can help me where to seek help for this problem??
i am desperate to seek help from the embassy and afraid that my husband will be put into a situation that may cause him to stay in saudi and force to end up his contract. He felt already depression and really wanted to go home,,,
Please need advises from Expat.comgers...
thanks a lot

Please contact your Overseas Filipino Workers association, they will help you out with the situation and extend legal help as well.

what is the penalty of the employer if they breach the contract of their employees?

Nothing, you just bite the bullet and live with it....

madam, i just want to ask how much would i pay for not completing my conttract here at riyadh ksa?? im a service crew of a restaurant and im planning to go home because of personal family problem that affects my duties and responsibiliets in my work place?
thank you

mam, i have a question? in my case ive been working here in riyadh as a service crew of a restaurant and im planning to resign.?how much i would pay to my employer ? im working here for only 5 months..is it allowed or not? i want to go home and i cant continue my job because of personal family problem that affects my duties and responsibilities. thank you for response.

sir, i have a question. how long would be processing the exit visa? and is it okay if my arabic name in my iqama is mispelled and wrong? do i need to change and correct it before i go exit or not??thank you for response.

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