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Calculation of Indemity of Terminated Employee

I am a regular reader of your Legal Clinic column and have the following question for clarification: The question is about a company which has terminated the services of one of its employees, stating that his services have been terminated with effect from 31-12- 2013, with a notice period as per the Kuwait Labor Law, until 31-03- 2014 and asking whether the employee wants to stay until 31- 03-2014 or leave earlier. How will be the calculation of this employee’s end of service indemnity and leave balance. Will it be calculated until 31-12-2013 or until the last day the employee works in the company.

Name withheld

Answer: In this case we need to have a very close look at Article 44(d) of the Kuwait Labor Law (enacted on Feb 20, 2010) which says as follows: “The employer may exempt the employee from work during the period of notification but shall count such period within the period of service. The employer shall pay the worker all his entitlements and remuneration for the period of notification.” So you see, the law on the issue is very clear. If the employer terminates you or even if you resign, the employer — if he so desires — can exempt you from working during the notice period but if this is “his wish” then he has still to pay you your salary for the three months you don’t work and your service will also be counted until the end of the notification period, which means that your indemnity must be calculated until the end of that very period. Your leave will also be calculated until the end of the notification period. On the other hand, if you resign, you have to serve until the end of the notification period (unless the employer is ready to relieve you) or your service and all the other calculations will be based on your last day of service.

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