Definition of Force Majeure under Saudi Labor Law
In the context of Saudi labor regulations, force majeure refers to an external, unforeseen, and uncontrollable event that makes the fulfillment of contractual obligations absolutely impossible.
According to the interpretative memorandum of the Labor Regulations, “force majeure is any event that cannot be foreseen or prevented by human effort, provided that it leads to a permanent and absolute impossibility of performance until the end of the contract, not merely a temporary difficulty.”
Examples include wars, floods, earthquakes, severe pandemics, and major natural disasters.
In other words, force majeure is an exceptional circumstance that renders either party incapable of fulfilling the contract,
causing it to terminate automatically under the provisions of the law.
Legal Provisions Allowing Termination of Employment Contracts Due to Force Majeure
Saudi Labor Law explicitly recognizes force majeure as a legitimate reason for terminating an employment contract.
Article (74) of the Saudi Labor Law states that:
“An employment contract shall terminate in any of the following cases: … (5) force majeure.”
Thus, force majeure is considered a lawful cause for termination without imposing additional or arbitrary compensation on either party.
Other labor-related regulations also protect both parties in such circumstances.
Obliging the employer to follow certain procedures before final termination.
In general, Article (74) serves as the principal legal basis governing termination for force majeure under Saudi law.
Distinguishing Force Majeure from Exceptional Circumstances
There is a fundamental legal distinction between force majeure and exceptional circumstances.
Force majeure implies that performance has become objectively impossible,
whereas exceptional circumstances allow for the modification of obligations when performance becomes excessively difficult, yet still possible.
In short:
- Force majeure = permanent and absolute impossibility.
- Exceptional circumstances = temporary hardship or increased burden on one party, but not impossibility.
In practice, force majeure often leads to permanent contract termination, while exceptional circumstances justify suspension or adjustment of obligations without ending the contract entirely.
Importantly, the Saudi Labor Law refers specifically to force majeure
(Article 74) as a ground for termination, without introducing the concept of exceptional circumstances as an independent basis. This gives force majeure stronger procedural and binding force in labor disputes.
Employee Rights Upon Termination Due to Force Majeure
When an employment contract is terminated due to force majeure, the employee’s accrued rights remain fully protected.
The employer must pay all wages and allowances due up to the termination date.
As well as compensation for unused annual leave.
Furthermore, the employee is entitled to full end-of-service benefits, calculated under Article (84) of the Labor Law:
- Half a month’s wage for each of the first five years of service, and
- One full month’s wage for each subsequent year.
Because termination for force majeure is considered legitimate, the employee receives full statutory entitlements, unlike resignation cases where benefits are reduced.
It should also be noted that termination on the grounds of force majeure cannot be treated as unfair dismissal.
As long as the conditions of impossibility are met. The employee must also receive a certificate of service and a detailed statement of final entitlements upon termination.
Role of the Ministry of Human Resources and the Labor Judiciary
The Ministry of Human Resources and Social Development (MHRSD) plays a central role in enforcing and interpreting the provisions related to termination due to force majeure.
The Ministry has issued regulatory circulars and interpretative guidelines outlining the steps employers must take before resorting to termination — such as reducing working hours, adjusting wages, or using government support programs first.
It also affirmed that the employee’s rights remain protected, stating that if a contract is terminated without a legitimate basis, “the aggrieved party shall be entitled to the entitlements prescribed by law or by contract, based on the last wage received prior to the exceptional circumstance.”
The Labor Courts and Labor Committees apply these rules judicially.
>They adhere to the principle that: “When performance of an obligation becomes impossible, the corresponding obligation of the other party ceases.”
Courts assess whether the claimed event truly meets the conditions of force majeure, and if so, they ensure the employee receives all due entitlements under the law.
In summary, the Ministry provides interpretative and procedural guidance, while the judiciary ensures that is applied fairly and consistently with statutory provisions and Sharia principles.
Conclusion
Al-Mashora Law Firm brings extensive experience in Saudi labor law and workforce compliance.
Our legal team provides specialized consultations to employers and investors, ensuring that their employment practices align with current labor regulations and that their contractual obligations remain protected during unforeseen disruptions.
We remain committed to offering reliable legal strategies and representation that reflect our clients’ trust.
and uphold the highest standards of professional integrity.