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Salary clause in labor law shift hit – Cut up to 50%

KUWAIT CITY, June 3: Even though the government referred a bill to the National Assembly to amend the labor law of the private sector in a manner that allows employers to reduce the salaries of their employees or give them special leave with reduced wages during the COVID-19 crisis, informed sources indicated that there are legal challenges that prevent the shielding of Kuwaitis from this government bill.

The sources explained that the government promised to cooperate with the National Assembly to agree on a formula to ensure the new law does not get petitioned when passed.

The government believes that it has provided adequate protection for Kuwaitis in the private sector, such as by doubling the employment aid allowance.

It is not enthusiastic about withdrawing the bill, but it is ready to attend the meetings of Parliament’s committees to discuss the formula to be agreed upon by the two authorities.

The sources warned that any hesitation or delay in adopting the law will render many private sector companies to suspend work – even temporarily – and thus stop the salaries of all employees, including Kuwaitis, for whom the government wants to guarantee minimum salaries until this pandemic ends.

They stated that the government will assure the Parliament of its commitment to national employment and replacement of expatriates in the private sector, especially since there are more than 150,000 job opportunities that can be replaced by Kuwaitis.

Also, the sources revealed that the average salary of a Kuwaiti man in the private sector is about KD 1,429 and of a Kuwaiti woman is about KD 879. On the other hand, the average salary of an expatriate man in the private sector is KD 285 and of a woman is KD 387.

MP Ahmed Al-Fadl argued the phrase ‘exceptional circumstances’ mentioned in the bill could include a number of situations that the employer might use in justifying the salary reduction.

He cited as an example a small business which might be negatively affected by road repair works that may last for weeks or months. He went on to ask: What if an earthquake occurs and results in the implementation of lockdown? He then talked about the main article of the bill, which gives the state minister for economic affairs the authority to allow employers to reach an agreement with the employees to reduce their salaries by 50 percent maximum or give them vacation with low salary that is not lower than the minimum salary in Kuwait. He urged the citizens to find out the minimum salary in the country.

He added the bill does not stipulate the conditions for a business or company to prove that it suffered damages, instead the bill leaves the issue for the minister to decide. In this manner, any company including those which made huge gains during the crisis like telecoms and face mask companies can claim that they suffered losses, he asserted. He concluded that the bill implies some ministers are doers rather than thinkers and they stain the government’s performance.

Meanwhile, the new bill put the government in the firing line of the Parliament, and placed it under heavy criticism. Rapporteur of the Parliament’s Health Affairs Committee MP Saadoun Hammad called for the bill to be withdrawn from the Finance Committee and returned to the health committee due to its jurisdiction, suggesting that referring it to the finance committee was a mistake.

Hammad said, “The Health Committee had earlier amended Article 4 of the government’s draft bill that protects the citizen and stipulates that the provisions of this law are excluded from the provisions of the Social Security Law No. 61/1976. This amendment shields the national workers from salary cuts or open leave period”.

He explained that the committee completed its report by approving this amendment and waited for the bill that the government said it was working on in a rush. However, it came as a surprise when the bill was referred to the Finance Committee.

This referral was wrong because the law is within the jurisdiction of the Health Committee.

Furthermore, MP Khaleel Abul called on the government to stop improvising measures in its bill and decisions that do not ensure protection for the citizens. He said, “Since the beginning of the COVID-19 pandemic, we have been keen not to interfere and obstruct the work of the government and frustrate the concern of the youth on the front-lines. However, the government’s submission of such an odd bill revealed the need for the Parliament to review its procedures”.

Abul stressed that the Parliament will reject any law that does not ensure protection for Kuwaitis, calling on the government to desist from improvised decisions and bills that are unclear.

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