Tuesday , December 12 2017

Various Clarifications on Termination, Final settlement, vacation etc

I am working with a Korean company, having different subcontract works under Government Projects. I would like to get few clarifications about some points which are mentioned hereunder:

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 from his absconding date, he is claiming his dues and still he is 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 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 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 more than 7 days without any information to company or valid excuses. In this case, can we consider him as resigned as per Kuwait Labour Law. What will be his 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 ever open contract abides with 3-month notice period?

4) Calculation of leave salary and indemnity are based on basic salary in my company. Is it right as per Kuwait labour rules? Or all allowance to be included?

 

Name withheld

Answer: All things being equal, the company would have had to pay the employee for the remaining six months of the 12-month contract. He would have also qualify for final settlement which would include an air ticket if the latter was included in the terms of the contract.

On the other hand, if the employee was sacked for not being professional, and if not being professional here means that he did not live by the terms of his contract, then he would have nothing to claim from his employer.

In fact, leaving Kuwait without going through the necessary process to end his marriage with the company was wrong and the company can stand on this to deny him his end of service entitlements. As for taking legal action against the company, that is within his legal remit but as to whether he can get judgement in his favour is another thing which can only be decided by a competent court of jurisdiction.

With regard to the unsettled bank loan, the issue is between the employee and the bank in question. The company can only be held responsible if they stood as guarantors to the employee.

On your second question, the Kuwait Labour Law says that an employee who absents himself from work for seven working days without a valid reason for the action, will be considered to have resigned from his job. Yes, the employee under such a circumstance will be entitled for final settlement which will be in accordance with the number of years of service.

The three-month notification period by both the employer and the employee is a stipulation under the Kuwait Labour Law and cannot be dispensed with.

However, the Labour Law also spells out certain conditions under which an immediate termination of the contract by either the employer on the employee is permitted.

We hope this answers your third question. According to the Kuwait Labour Law, indemnity should be calculated by using the latest remuneration which includes the basic salary in addition to all the allowance paid at regular intervals.

Your company, (as indeed many other companies), is therefore wrong in considering only the basic salary in calculating the indemnity.

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