Indemnity
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I joined my current employer on June 6, 2011. I got a termination notice from the company on 4th April 2016 with the notice period of 3 months (Last date of service as July 3, 2016) due to the contract expiry. Now the company is ready to release me at any time due to the client requirement of transferring me to another contract. Based on my joining date, I will complete 5 years of service with the company by 5th June 2016. Request you to please provide clarification to the following queries: Does it make any difference to my indemnity if I get released earlier than 5th June 2016 (5 years service) or after 5th June 2016. How much will be my end of service benefits in the two cases i.e. if I get released by May 31, 2016 and June 15, 2016 (Monthly is salary – KD 1,200 while my leave balance as of April end is 13 days)
Name withheld
Answer: Before we go on, we need to have a close look at Article 44 (d) of the Kuwait Labor Law enacted on Feb 20, 2010. Article 44(d) says 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, it really doesn’t matter whether you are released before 5th June, immediately or after the last day of your notification i.e. July 3, 2016, your indemnity must be calculated until July 3, 2016. Please also remember that you are entitled to the full indemnity because your services are being terminated by the company.
Please keep in mind that when an employee is terminated he is always entitled to the full indemnity regardless of the period of service. It’s only when you resign you get half the indemnity if your service is between three to five years and two-thirds if your service is five to 10 years. And once you have put in 10 years service you get the full indemnity even if you resign. So as your service will be only a few days over the 5 year-period we will take the same as 5 years for the calculation of your indemnity which will be as follows.
15 days for each year of service = 75 days But these 75 days have to be divided by 26 (working days in a month) = 2.88 months pay = 2.88 x KD 1,200 = KD 3,456 So KD 3,456 is the amount you should get as your indemnity whenever you are given the release, just because of Article 44(d). We would like to draw your attention to another very important aspect of the Kuwait Labor Law i.e. when your service is considered until the end of the notification period, your balance of leave must also be calculated until that date.
This means your leave balance will be 16 days and not 13 days and these 16 days must first be divided by 26 (working days in a month) = 16 / 26 = 0.6154 x KD 1,200 = KD 738.480 So, KD 738.480 will be the payment for your annual leave balance which means your total dues = KD 738.480 + KD 3,456 = KD 4,194.480
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