Workers must be aware of the end-of-service pay or indemnity explained and detailed in the Private Sector Labor Law for them to understand why they got a certain amount as indemnity. Despite the calculations they have in mind, they have to know if the amount they received is in accordance with the law or not. If a colleague does not receive the same indemnity as you got when your contract with the same company ended, it is not only because your contract is different from his, but also because the law set standards on how to calculate and regulate the end-of-service pay. Several factors come into play such as the number of years in service, type of contract and way of terminating the contract.
Article 51 of law number 6 for the year 2010 regarding workers in the private sector stipulates the calculation of indemnity, taking into consideration the type of contract – whether a worker is paid monthly, weekly or daily.
The law states that a worker shall be entitled to end-of-service pay as follows:
- The worker shall be entitled to 10 days remuneration for each of the first five years in service and 15 days for each year thereafter. The total end-of-service pay shall not exceed one year remuneration for employees who are paid daily, weekly, hourly or piecework.
- The worker shall be entitled to 15 days remuneration for each of the first five years of service and one month remuneration for every year thereafter. The total end-of-service pay should not exceed one-and-a half-year remuneration for employees who are paid monthly.
Article 52 states that a worker shall receive the full amount of indemnity as per the preceding article only if:
- The employer terminates the contract,
- The duration of the contract expired without being renewed,
- The contract was terminated in accordance with articles 48, 49 and 50 of the law. These articles are about the mistakes committed by the employer.
- A female worker terminates the contract as a result of her marriage within a year after the date of marriage.
Article 53 stipulates that the worker shall be entitled to half of the end-of-service pay stipulated in Article 51 if he terminates the work contract which has an indefinite term and the period of service is not less than three years and not more than five years. If the period of service reaches five years and less than 10 years, the worker shall be entitled to two thirds of the indemnity and if the period of service exceeds 10 years, the worker shall be entitled to full indemnity.
This is the reason why you should assess your situation based on the applicable laws, not that of your colleague. You should always be aware of laws regulating the work contract.
By Atyab Alshatti, Esq