Monday, November 10, 2014

My End of Service Benefits Computation is correct or not?

My End of Service Benefits Computation is correct or not?

Question by Visitor
I would like to ask about end of service benefits. Actually I am going final exit tomorrow and I already took the bank cheque. I work in private hospital in Riyadh since August 2009. My contract states that every 2 years is automatic renewal (2 years vacation). I only have one vacation in the 5 years and that was on September to November 2013 (after 4 years). I resigned and only completed 5 years and 20 days in my company. That is breach of contract because I didn’t completed the 3rd contract because of automatic renewal. I should be exit in 6 years and not in 5 years. My last salary is SR 3,592 and I only received SR 3,000/- plus as my end service benefit. Is the computation correct?

Answer by Steve
  1. Although you have asked one very simple question but there are some wrong concepts in your mind about which I want to clarify you. When a contract is expired and it is renewed automatically, it becomes an indefinite contract. Indefinite contract just needs one month’s notice period to be terminated. If you have given one month notice, you have not done any violation. It has been explained in detail in this article. “Fixed Term and Indefinite Contract

  • As far as your entitlement of leave is concerned, you were entitled to 21 X 4 = 84 days paid leave in 4 years. If after completing 4 years, you have taken 3 months = 90 days paid leave, I think they have compensated you well. If you have not taken leave for the fifth year, it is your problem as Saudi Labor Law prohibits employers to do leave encashment. It is covered in this article. “Leave Encashment under Saudi Labor Law
  • As far as End of Service Benefits are concerned, if you have really completed more than 5 years in the employment of that company. You were entitled to SR 6,118/- for ESB award of 5 years and 20 days. They have paid you on the assumption that you have not completed 5 years in the company. If you have just completed 5 years (not more than 5 years) in the company, ESB award will be SR 2,993/-. For further clarification, please read this article. “End of Service Benefits”. If you are still in Saudi Arabia, you can challenge them in court.

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