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18 October 2021

12 Rabee' Al-Awwal 1443

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The Labour Law No. 3 of 1962

Law Summary Record Type: LawNumber: 3Date: 19/03/1962 Corresponding to 13/10/1381 HijriNumber of Articles: 77Status: Canceled

Official Gazette :Issue: 2Offcial Journal Issue Publication Date: 01/01/1962 Corresponding to 25/07/1381 HijriPage from: 2591

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End-of-Service Benefits

24 Article

1. In addition to any amount due to the employee at the end of his service, the employer shall pay him a gratuity for the period of his service in accordance with this Law, for a minimum period of one year of service.

This gratuity shall be calculated as follows:

A basic salary plus a cost of living allowance, if any, for three weeks against each year for the first five years of the employee's continuous service.
A basic salary plus a cost of living allowance, if any, for four weeks against each year of service for the second five years of his continuous service.
A basic salary plus a cost of living allowance, if any, for five weeks against each year of the next ten years of his continuous service.
A basic salary plus a cost of living allowance, if any, for six weeks against each year of service exceeding twenty years of his continuous service.

3. After the first year of continuous service, the employee shall become entitled to the said gratuity for any part of the next year and prorated accordingly.

4. Where the employer terminates the employee after eleven (11) months of continuous service under conditions other than those stated in Article 20 above, and then reappoints him within two months from the date of terminating him, the employee's service shall in this case be considered continuous and uninterrupted for the purposes of applying this Article.

5. The employer shall have the right to deduct from the employee's gratuity any amount owed by the employee to the employer

25 Article

1. The provisions of Article24 above shall not apply to the employee in the following cases:

Where he has lost his gratuity in accordance with the provisions of Article 20 of this Law.
Where he left service under conditions other than those stated in Article 21 above, and without submitting to the employer the notice stipulated in Article 18 above.
Where he is a foreigner working for a national enterprise, in which case the agreement signed between both parties shall prevail.

Where the employee resigns and has given notice to the employer in accordance with Article 18 of this Law, his gratuity shall be calculated as follows:

One third of the gratuity where his service is more than two years but less than five years.
Two thirds of the gratuity where his service is more than five years but less than ten years.
A complete gratuity where his service is more than ten years.

26 Article

1. Where the employee dies during his service for reasons relating to the carrying out of his duties or otherwise, the employer shall, not later than fifteen (15) days after the date of death, deposit at the appropriate court any wages and other entitlements due to the employee, in addition to the gratuity defined according to Article24 of this Law.

The employer shall submit to the court a detailed report showing the calculation of all of the deceased employee's entitlements, and a copy thereof to the Director.

The court shall distribute such entitlements between the deceased employee's heirs in accordance with the Islamic Sharia or with the relevant laws applicable in his country of nationality. Where his heirs are not identified for a period of one year, his entitlements shall be returned to the employer

27 Article

1. Where the employer provides his employees with a retirement scheme or similar system that offers better benefits than the gratuity and end-of-service benefits stipulated inArticle24 above, he shall not pay such gratuity and end-of-service benefits.

Where the net benefit received by the employee from the employer's retirement scheme is less than the gratuity and end-of-service benefits, the employer shall pay the gratuity and benefits to the employee according to Article 24 and return to him any subscriptions he would have paid in the said retirement scheme. The employee shall have the right to weigh the two options and decide which is appropriate to him.