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Tuesday , August 20 2019

Company closing due to financial and family issues

I am an Indian engineer now working in a private trading company in Kuwait. I have seen few articles by you on the labour law clarification in newspapers and hence I seek your kind advice on my below issues.

I have been working in this private company since April 2010 and recently (2nd Dec 2017) my employer conveyed that due to financial problems and their internal family issues, they may not be able to continue business and advised me to look for other job.

They have given me a letter signed by the company’s authorised signatory but without a stamp stating the above.

I have the following queries:

1. As per Kuwait Labour Law, can I consider this as a termination letter with notice of 3 months and in case if the employer urges me to leave early, am I eligible for the full 3 months pay?

2. I have not taken my annual leave for this year which fell from last week of December 2017 to last week of January 2018. During the termination notice period can I still travel and use my annual leave with full pay?

3. I am on a transferable visa and in case I find a new job after the termination notice period (i.e. after the 3 months of termination notice), how long can my current employer extend/keep my residence in their company until my new company transfers to their residency. This is just to know how much grace period is allowed as per Kuwait Labour Law – so the current employer does not use this situation to cancel my residence and put me in a difficult situation.

4. When I completed 4 years (during 2014), my current employer renewed my contract closing and paying all my indemnity for the last completed 4 years and made me sign the new contract as fresh. So, in this case how will my indemnity be calculated from 2014 till my completion of the termination notice period.

Kindly, advise me on the above and I will be very thankful for your accurate legal advice on the same.

Name withheld

Answer: To be on the safer side we advise that you seek clarification from the management of the company as to what the implications of their letter to you are. If they are forthcoming in their response then you go according to that.

On the other hand if they are not, then make it clear to them that you consider the letter given to you as a letter of termination of your services and will proceed on that basis in accordance with the Kuwait Labour Law with the rights and obligations inherent it.

Under this scenario if they ask you to leave early they will have to pay you 3 months salary in lieu of the 3-month notice period. As regard your unused annual leave, that can be arranged between you and the company as to whether they will allow you to use part of your 3-month notice period for the holidays or not.

If they say ‘no’ however, they have to pay you for the unused holidays and this will be included in your indemnity payment.

According to the labour law, when a company terminates your serives it must give you adequate time to search for a new job and hence a new sponsor.

Under the law, your employer is also enjoined to give you at least a day off in a week during the notice period to look for a job. This not withstanding, we must point out that, the law does not give you a blank cheque to unnecessarily delay with the transfer process under the pretext of still looking for a job.

In a similar vein your current employer has to give you reasonable time after the expiry of the notice period to continue looking for a job if you could not land one during that period.

In short, there is no time frame spelt out in the Labour Law within which to complete the transfer process.

Your four-year indemnity will be calculated as follows: 15 days pay for each of the four years service = 60 days but this has to be first divided by 26 (working days in a month) = 2.307 months salary = 2.307 x your monthly salary (which you have not indicated). In addition to this, you should be paid for all the unused days of your annual leave.


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