Business Glossary /

Saudi Labor Law

Settlement Agreement

Settlement Agreement

A mutually agreed documented resolution between employer and employee to settle employment claims or end the employment relationship.

A settlement agreement in Saudi Arabia is a legally binding document in which an employer and employee agree to resolve employment disputes or bring the employment relationship to an end on mutually agreed terms. Typical settlement terms cover the payment of all outstanding financial entitlements (salary EOSB unused leave) waiver of future claims and immigration closure steps (Iqama cancellation exit visa). Settlement agreements must be signed by both parties and ideally attested through the MHRSD or Qiwa to be fully enforceable. Inclusive Solutions advises on the drafting and execution of settlement agreements ensuring full legal compliance.