Preparing a formula for terminating a contract by mutual consent

Preparing a formula for terminating a contract by mutual consent

The formula for terminating a contract by mutual consent is one of the regulatory means that ensures the termination of the contract between the worker and the employer in a legal manner that preserves the rights of both parties and is in line with the Saudi system. It has received increasing attention from companies and employees recently, because there are rapid legal and economic developments in Saudi Arabia, and from here the importance and necessity of understanding contracts emerges The formula for terminating a contract by mutual consent is considered one of the best legal means that is characterized by smoothness and ease in terminating contracts, in addition to saving time and effort compared to judicial procedures that take a long time to terminate the contract.

Conditions for the formula for terminating a contract by mutual consent

There are several basic conditions for a formula for terminating a contract by mutual consent, the most prominent of which are:

• The existence of a clear written document between the two parties stating a desire to terminate the contract without coercion.
• The parties’ data must include the name and identification numbers of the first party, as well as the name and identification numbers of the second party.
• The date and number of the original contract to be terminated must be specified and signed by both parties.
• It must include all of the worker’s financial obligations, such as dues, overdue salaries, end-of-service benefits, and leave compensation.
• The worker must commit to handing over the covenant delivered to him, such as papers and documents, before terminating the contract.
• The release form must include the worker’s acknowledgment that he has received all his financial rights and dues.
• The parties must sign this formula and specify the date of signing.

The importance of the formula for terminating a contract by mutual consent

Using a consensual contract termination formula offers several advantages, including:

• Providing legal protection for both parties and documenting their rights, as the presence of both parties’ signatures on the formula proves that the contract was terminated with the consent of both parties, without coercion, and without arbitrary dismissal.
• The two parties avoid resorting to the judiciary to terminate the contract, thus reducing the chances of disputes and disagreements arising between the two parties, because the termination formula provides a clear settlement of all dues and rights.
• Termination of a contract by mutual consent is easy and flexible, as it provides solutions that serve the interests of both parties.
• Terminating the contract by mutual consent helps maintain a friendly relationship between the worker and the employer, which benefits the worker later when requesting recommendations or obtaining another job.
• Ensuring compliance with the regulations approved in the Saudi system, which ensures the ease and safety of termination procedures.

When the formula for terminating a contract by mutual consent becomes invalid

There are several cases in which the formula for terminating a contract by mutual consent becomes invalid, the most prominent of which are:

• If it is proven that one of the parties was forced to sign the termination document under pressure or threat.
• If the termination formula includes any clause that violates public order, or conflicts with applicable laws and regulations.
• Termination is void if the employee’s financial obligations such as wages or bonuses are not settled.
• The validity of the termination formula may be affected by including unclear terms or may cause future disputes.
• Termination becomes void if the termination formula is not documented on official platforms such as Qawa.

The importance of documenting the formula for terminating a contract by mutual consent on official platforms

Documenting the formula for terminating a contract by mutual consent on one of the official platforms is a strong example that achieves many advantages, including:

• It guarantees the rights of both the employer and the worker before official authorities.
• Avoid disputes or claims that have no justification.
• Official documentation of the formula ensures that all financial dues to the worker are paid.
• Documenting the formula on official platforms such as the Qawi platform is consistent with Saudi Arabia’s digital transformation vision, enhancing the workplace’s protection system.
• Official documentation terminates the contract quickly, saving both parties effort and time.

Reasons for resorting to terminating the employment contract by mutual consent

Sometimes one party resorts to terminating the employment contract by mutual consent for several reasons, including:

• The employee’s desire to change his career path to search for a different field of work.
• The motivation for terminating the contract by mutual consent may be for the employee to receive a job offer with better benefits and salary.
• There is great and exaggerated work pressure on the employee, or disagreements between him and his colleagues that make him want to terminate the contract.
• The worker may be forced to terminate a contract by mutual consent because his health conditions do not allow him to perform his job.
• Changes may occur in the company due to economic conditions that force the employer to reduce the number of employees, and in this case he resorts to consensual termination to avoid legal disputes.
• The company may want to hire workers with different skills and competencies that are in line with its future plans.
• The employer may want to restructure the company’s human resources.

The difference between resignation and termination of a contract by mutual consent

There is no doubt that resignation and termination of the employment contract by mutual consent lead to the termination of the labor relationship, but there is a fundamental difference between them, which lies in the fact that resignation is the worker’s sole will to terminate the contractual relationship, which means that the worker is the one who makes the decision alone without the need for the approval of the company or business owner, and resignation requires that the worker submit a letter and abide by the notice period specified in either the contract or the system While terminating an employment contract by mutual consent is a vital process based on a mutual agreement between the worker and the employer to terminate the employment relationship amicably and gives both parties the right to determine the terms that suit them.

Essential Tips When Terminating a Consensual Contract

When terminating an employment contract by mutual consent, both parties must follow several steps, the most prominent of which are:

• There must be a written document containing the written consent of both parties to terminate the contract by mutual consent to avoid disputes and disagreements that may arise in the future.
• Both parties must precisely specify the contractual relationship and the date of termination of the contract in the document.
• The reasons for resorting to termination of the contract by mutual consent must be determined.
• The employer must register the termination of the employment relationship on one of the official platforms in order to avoid financial fines.
• The worker must request a certificate of experience that includes the duration of his work and his skills during the work period.
• Both parties are required to retain copies of documents relating to the termination of the contract, including any agreement or correspondence between the parties.

What are the employee’s rights when terminating the contract by mutual consent?

When the contract is terminated by mutual consent, the employee has several rights, including:

• The employee is entitled to receive the salary due for all days he began his work until the date of termination of the contract.
• If the employee does not use his annual leave, he is entitled to cash compensation for that leave.
• He is entitled to receive an end-of-service bonus in accordance with the Saudi system, and this bonus is payable even if it is agreed to the contrary.
• The worker has the right to request from the employer a service certificate that includes his performance of his work and the nature of the work.

The importance of hiring a specialized lawyer when terminating a contract by mutual consent

Termination of a contract by mutual consent is a legal procedure that requires extensive experience, so it is strongly recommended to seek the assistance of a lawyer from the office of Lawyer Abdul Majeed Al Rashid, not because it is one of the best law firms in Riyadh, but because:

• He has extensive experience in drafting and terminating contracts in ways that guarantee the rights of both parties.
• He has knowledge of all laws and regulations applicable in Saudi Arabia, which gives him the ability to provide accurate legal advice.
• Lawyer Abdul Majeed Al Rashid’s office is distinguished by its meticulous preparation of legal agreements, which spares the parties future disputes.
• If you want to draft or terminate a contract by mutual consent, the office of lawyer Abdul Majeed Al Rashid represents the ideal choice to complete the matter professionally, and you can contact us by visiting our website.

Frequently Asked Questions

Is termination of the contract by mutual consent worth Sand?

Sand does not deserve to terminate the contract by mutual consent because the Sand system supports, for a temporary period, people who left or lost work for reasons beyond their control, while terminating the employment contract by mutual consent was based on the agreement of both parties.

In conclusion

We discussed the formula for terminating a contract by mutual consent as a legal tool that guarantees the rights of both parties. We reviewed the conditions of this formula, the most important of which is that there be a clear written agreement between the two parties. We also explained when the formula becomes invalid, as it is important for both parties to know the cases in which the termination formula becomes invalid in order to avoid potential disputes and disagreements. In addition, we discussed the reasons for the two parties resorting to terminating the contract by mutual consent and stressed the importance of documenting the termination of a contract by mutual consent on official platforms We also discussed the difference between resignation and termination of a contract by mutual consent and reviewed the necessary advice when terminating a contract by mutual consent. In addition, the article highlighted the employee’s rights when terminating a contract by mutual consent.