Document background
The Mutual Contract Termination Letter is essential in Saudi Arabian employment relationships where both parties agree to end their employment contract amicably. This document is used when an employer and employee mutually decide to terminate their working relationship before its natural conclusion or end date. It must comply with Saudi Labor Law and Sharia principles, including proper calculation of end-of-service benefits and final settlements. The letter serves multiple purposes: it documents the mutual agreement, specifies the termination date, outlines financial settlements, addresses company property return, and includes any continuing obligations such as confidentiality or non-compete clauses. This document is particularly important in Saudi Arabia where formal documentation of employment changes is crucial for both legal compliance and visa/sponsorship purposes.
