An employment contract is an agreement signed between employee-employer. It states the responsibilities of the employees, the rights of workers, what the accountabilities are, and what kind of benefits they are liable to from their employer.
Contracts are terminated either on legal grounds or sometimes any of the party face arbitrary dismissal. This termination could be made either by the employer or the employee. Employers dismiss the employee for termination whereas employees resign from the job in the other case.
When and Why Employment Contracts are terminated?
There could be many reasons behind the termination of the employment contract. However, in case of wrongful termination, the party terminating the contract is legally responsible for paying off compensation to the affected party. Termination of employment contracts could be made as:
- Employees fail in the medical examination
- With discretion in case of unlimited contracts
- Both parties agree on terminating the contract
- Without termination notice during the probation period
- Employees are reaching the age of retirement
- The contract terminates if not extended before the expiry
Prior to proceeding with the dismissal of the employees, the companies should consult legal advisors to complete the paperwork. Failing to comply with the termination terms stated in the contract or following the general laws would make both parties face legal charges.
Termination of Contract by the Employer
Most often, employers terminate the employees if they fail to perform their duties stated in the contract. In case they fail to obey the management orders and break the integrity of working in the company then they are most probable to get terminated. Other causes of employment contract termination by the employer include:
- Illegitimately benefits from his position
- Disclosure of company’s secrets in the market
- Being absent of the job for consecutive 10 days
- Causing material loss to the company intentionally
- Try to obtain the job by illegal means
- Fail to take the necessary safety measure at work
Employers should follow the legal procedures for terminating the employees to save themselves from going to court. Moreover, it is the right of the company to save its material and human assets on legal grounds and follow the terms which are stated in the employment contract.
Termination of Contract by the Employee
Employees can also terminate the contract if they are not willing to provide their services anymore to the company. This termination is sometimes made with prior notice whereas some employees stop working without giving notice to the employer. The termination is based on:
- The employee faces discrimination in the workplace
- Any violent or fraud behavior reported against the employee
- The employee fails to follow the precautionary measures
- The employees terminate the contract illegitimately
- Fail to perform his duties as stated in the contract
- Employees are assigned different work from the one stated in the contract
Termination by the employees could be made on legitimate terms as well as they can also leave the company wrongfully. In case they have caused any damage to the organization, then the company owner has the right to get compensation before the termination process is completed.
Employees leaving as per the contractual terms can get the end of services to benefit from the employee. Whereas the gratuity terms should be met as per the rules and regulations of Saudi Arabia otherwise the employees are exempted from end-of-service benefit