Friday , September 21 2018

Kuwait Labor Law

I am working with a Korean company, having different subcontract works under government projects. I would like to get a few clarifications about some points:

1. Terminated employee left Kuwait without employer’s permission/ without visa cancellation which can be considered as absconding. He worked only 6 months under his one year contract period. He was not professional and that is the reason of termination. After 6 months of his absconding date, he is claiming his dues and he is still out of Kuwait. In this case, what is the final settlement eligibility for him? Is he eligible for

(a) Final settlement such as air ticket, salary for the remaining period of the contract (6 months), leave salary, etc.

(b) Is it legal for him to claim his dues while he is working in Abu Dhabi currently.

(c) Is it possible for him to take legal steps against the company.

(d) Understand that he took loan from local bank and not settled.

2. Employees going on vacation and not coming back on time and extending the leave for over 7 Days without any information to the company or any valid excuses. In this case, can we consider him as resigned as per Kuwait Labor Law. What will be their eligibility for final settlement?

3. If an employee is under open contract, is it possible for the employer to terminate him with immediate effect and without compulsory notice period? Or do even open contracts require a 3-month notice period?

4. Calculation of leave salary & indemnity are based on Basic salary in my company. Is it right as per Kuwait Labor Rules? Or are all allowances to be included?

5. When an employee is leaving on vacation, is it necessary to pay his food & accommodation allowance during the vacation period?

Name withheld
Answer:

From your questions it is clear that you are asking them on behalf of your company and we will do our best to clear your doubts.

1. First of all, a person who leaves the company without notice or without completing his contract and is absent for over 7 consecutive days is considered to have resigned. But in your case, this person worked for you for only 6 months and as such he is not entitled to any indemnity. He would have been entitled to indemnity only if he had worked for three years or if you had terminated his services. As things stand he can’t sue you for anything. In fact, the company can sue him for non-completion of contract. Even if the verdict is issued in Kuwait, it can be implemented in any GCC country. On the issue of the bank loan, this is personal issue between him and the bank unless the company was a guarantor in any way.

2. All those who are absent for over 7 consecutive days are to be considered as having resigned, according to the Kuwait Labor Law. And they will be entitled to indemnity according —half if they have served three years or more but less than five years, two thirds if they have served five years but less than 10 years and full indemnity if they have 10 years or more.

3. All contracts — except fixed period contracts — require a three month notice. So, open contracts require a three-month notice.

4. Calculation of leave salary and indemnity must be based on “remuneration”, according to the Kuwait Labor Law although most companies are in violation of this law as do otherwise. And “remuneration” is defined by the Kuwait Labor Law as the basic salary plus all the allowances paid regularly. So, if you want to follow the law you must include the allowances in the calculations.

5. And lastly, both the housing allowance and food allowance must be paid with the leave salary. The only allowance not included for this purpose is the transport allowance.

 

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