I have been working in my company since 15.05.1995 but due to a drop in business the management has decided to close the division. And termination letters dated 25-07- 2016 have been issued to the staff. My question is that, how will I calculate my service indemnity: my basic salary is KD 824 which is also mentioned on the work permit, plus KD 20 as cellphone allowance.
Can you please inform me on the correct calculation of the service indemnity. Also kindly let me know if I am required to keep working in the office until the end of the notice period. If I continue working until the end of the notice period, the company may blame me for any misuse of company documents.
Answer: First of all, you have to keep working until the end of the notice period unless the company itself decides to relieve you of your duties before the completion of the notice period. It does not depend on you, regardless of what you feel could happen. This period will still, however, be counted in your service. So your total service will be 19 years 5 months.
Secondly, the calculation of the indemnity is based on remuneration, i.e. the basic salary plus all the allowances you receive at regular intervals. So, for the calculation of the indemnity, your salary will be KD 844.
And lastly as your service is over 10 years you will get the full indemnity which will be calculated as follows: Service: 19 years 5 months Salary: KD 844 For each of the first 5 years you get 15 days pay per year = 75 days pay but these 75 days have to be first divided by 26 (working days in a month) = 2.88 months salary For the remaining years of service you are entitled to one month’s salary for each year = 14.42 months pay
Total indemnity = 17.3 months pay = 17.3 x KD 844 = KD 14,601.200
As your services have been terminated, plus the fact that you have put in over 10 years, you are entitled to the full above amount.