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Benefits - Final Settlement

Thank you very much for your reply which you published earlier. I am sorry for not mentioning some crucial details. Please find below my revised query.

I had joined a company on June 2, 2013 and worked for 6 months untilI was terminated on Nov 28, 2013 without having to serve the notice period of 3 months. They had paid me the salary for the month of December, January but are currently holding on to the March salary as they require me transfer my residence.

Nevertheless, I had asked them to verify my final settlement. To my surprise they have informed me that my annual leave is not included in the final settlement as I have not completed 9 months. Could you verify this statement?

Just for your information, other than the gross salary I was also entitled to roundtrip tickets for myself and family (5 tickets) yearly. I was entitled to a 4 months salary as bonus on the basis of an annual performance review.

Are the above benefits included in the final settlement or indemnity calculations? (especially the bonus part).

Name withheld

Answer: Lets talk aboutall the issues that you are facing … one by one, starting with the most important.

First of all, please remember that the three-month notice period must be counted in the service regardless of the fact that the company has exempted you from serving out this period and is paying you for these three months.

In this connection, please refer to Article 44 of the Kuwait Labor Law which states that “the employer may exempt the employee from work during the period of notification but shall count such period within the worker’s period of service. The employer shall pay the worker all his entitlements and remuneration for the period of notification.”

So, one thing they are doing already and now they must pay you indemnity and other dues for the 9-month service (6 months on the job plus the 3-month notification period).

Secondly, this means you must get paid for your annual leave entitlement which is 9/12 x 30 days = 22.5 days leave. These 22.5 days must be divided by 26 and multiplied by your monthly remuneration to arrive at the correct leave payment.

Thirdly, you must get your indemnity for the 9-month service. Every allowance must be added to your basic salary, including payment for the air tickets, to arrive at the right figure to be used in the calculation of your indemnity.

While the cost of the air tickets and the bonus normally figures in the calculation of the indemnity, this will not be done in your case.

This is because you have to complete the whole year to be eligible for the air tickets for you and your family but as you have only 9 months service (counting the notice period) this facility will not figure in your calculations.

The bonus, as you have also said, depends on the annual assessment of your performance by the company and as your performance has not been found to be satisfactory — as evident from your termination — it is likely (or let’s say impossible) that your company will give you a good chit. So in this case, you will not get a bonus and it also won’t be counted in the calculation of your indemnity.

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