Legal Clinic

  • Company planning to shut down or terminate employees – Residence transfer

    I am an engineer working in Kuwait for the last 12 years. I recently changed my job — 2.5 months ago. The current company transferred my residency immediately after I joined with them.

    Now the company is planning to shut down the department or terminate employees. If so, is it possible for me to change the job & transfer my visa before one year? Please confirm.

    Name withheld

    Answer: If the company decides to terminate the employees every one of them, regardless of their length of service, has the right to transfer to another company. If, however, the company only closes down your department and transfers you to another department you will not have the right to transfer to another firm.

    Send your queries to [email protected] or [email protected]

    © Copyright 2016, Arab Times Kuwait

  • Accrued leave balance payment

    I have a question about my accrued leave. I resigned from my company effective May 31, 2016 completing the 3 months notice period. My question is that I have 33 days accrued leave.

    According to the law, should I receive this on or before my last day or shall it be paid to me later together with the indemnity (which I will receive after visa transfer to new employer).

    Name withheld

    Answer: According to the law, annual leave payment is to be made before you proceed on leave, except in one case — payment for balance of leave when you have resigned or your services have been terminated. So, in your case, your payment for balance of leave will only be made along with your other dues. Please remember, however, that the payment has to be made before you transfer to another company.

    Send your queires to [email protected] or [email protected]

    © Copyright 2016, Arab Times Kuwait

  • Calculation of indemnity as per Article 67 of the Kuwait Labor Law

    I have read your previous posts about the calculation of the end of service indemnity as per Article 51 of the Kuwait Labor Law.

    That is the 15 days per year for the first five years of service shall be paid out based on 26 working days per month, or effectively a six-day working week.

    For five (5) years of service, the indemnity is computed as 75 days/26 = 2.88 months remuneration and this is the current stance of my employer.

    However my employment agreement clearly defines my working week as “five (5) days, 48 hours workweek from Sunday to Thursday (9.6 hours per day)”.

    Given that I work five (5) days per week and not six (6), do I have an argument that my per annum indemnity should instead be calculated based on three (3) working weeks (15 days per Article 51 / 5 days per working week)?

    For five (5) full years of service, this methodology would see me receiving 3 weeks/year * 5 years = 15 weeks remuneration instead of 2.88 months.

    It is interesting to note that my 30 days annual holiday has been granted to me by my employer based on a five (5) day working week rather than the 6-day working week – so I have been receiving six (6) full weeks of holiday per year.

    The employer’s historical calculation of my annual leave days is not consistent with their current stance regarding the indemnity.

    Please also note that I was given my 3-month notice by my employer due to project completion and I did not resign.

    Name withheld
    Answer: The employer is correct in the calculation of the indemnity because according to Article 67 of the Kuwait Labor Law you are required to work 6 days a week and get one day off.

    Now the law allows companies to have a five-day working week and the companies do this by equally dividing the 6th day’s working hours over the other five days.

    This effectively means that you have a 6-day working week, according to the law. You are lucky your company is calculating your annual leave according to a 5-day working week. It would not be wrong if it gave you only 30 working days leave, according to a 6-day week.

    You see any employee is entitled to only one day off every week and only 30 working days paid leave every year. The company can give you more than 30 working days, not less in any condition, if it so desires but it is not bound to do so unless you have a contract which says otherwise.

    The contract, after a mutual agreement, can specify more than 30 working days annual leave. In every condition, unless otherwise specified, you are entitled to only 15 days pay as indemnity for each of the first five years of service, which after being divided by 26 (because a working month has defined as 26 days, not more, not less) works out to 2.88 months pay.

    So, the employer is correct.

    Now, coming to the payment of the annual leave — regardless of how it is being calculated, on a 5-day or 6-day week — you will find that you are being paid for only 30 working days per year, not even a day more.

    You see, if calculations were based on a 5-day week for calculation of payment for annual leave the 30 days would first have been divided by 22 instead of 26 as your employer is doing. The employer is only giving you one extra day off per week, he is not paying you more.

    Secondly, you are still working 48 hours a week and under the law you cannot be made to work over 8 hours a day.

    Your one day’s 8 hours have been equally divided over 5 days to enable you to have a 2-day weekend. So, practically you are still doing a 48-hour week regardless of how many days weekend you are getting, so the employer is right in his calculation of your service indemnity.

    And lastly on the question of your services having been terminated because of completion of your project, you are entitled to full indemnity regardless of your period of service. This will be based on 15 days pay for each of the first 5 years of service and one month’s pay for each year of service after the first 5 years.

    We would like to stress again that the 75 days of the first 5 years will be divided by 26 to give you 2.88 months pay as indemnity for that duration and one month’s pay for each year of service will simply be added to that total.

    Had you resigned you would have been entitled to only half the indemnity if your service was three years or more but less than five years; you would have got two-thirds indemnity if the service would have been five years or more but less than 10 years ; and the full indemnity only if your service had been 10 years or more.

    Kindly send your queries to [email protected] or [email protected]

    © Copyright 2016, Arab Times Kuwait

  • Annual leave salary should be paid before employee proceeds on leave – Article 71 of the Kuwait Labor Law

    I am from India. I got a release and joined my current company on July 17, 2014.

    1) I am eligible for 30 days paid leave but unfortunately I cannot take my annual leave this year due to some personal problems. Is it possible to ask my company to pay by leave salary without taking annual leave.

    2) My company opened the Kuwait office in June 2014. If somebody wants to go on vacations my superiors are saying that the company policy is to give the leave salary only after when we came back from leave, they will not give leave salary before we start the leave.

    As we understand, according to Kuwait Labor Law it is required that the leave salary should be paid before people go on leave.

    In this situation if I want to take leave and if company insists on not paying the leave salary before I start my leave what should I do?

    Name withheld
    Answer: Article 71 of the Kuwait Labor Law, enacted on Feb 20, 2010, clearly lays down that the employee must be paid his annual leave salary before he proceeds on leave.

    You must draw the attention of your superiors to this law because no company can have any law which is against any article of the Kuwait Labor Law.

    If the company insists on following its policy you can file a complaint against the company with the Ministry of Social Affairs and Labor, through the Labor Office in your area. Secondly on the issue of “encashing” your annual leave, the Labor Law says that can employee can’t give up his right to take the annual leave, with or without payment.

    Having said that, the Ministry of Social Affairs and Labor doesn’t interfere in the issue if both the company and the employee reach an agreement on the issue and the worker only takes the leave payment instead of going on leave. But the company can’t be forced to decide in favor of the employee who doesn’t want to go on leave. A mutual agreement is required to encash the leave.

    Send your legal queries to [email protected] or [email protected]

  • Project visa transfer

    I was hired from abroad on a Project Visa and I have been working in the same company since 5 years. I had lot of opportunities outside to join other companies but because of my visa status I was unable to transfer my residence. I am basically from IT background and I am currently looking for an opportunity. Please let me know if you have any information on the current rule for the Project Visa status.

    Name withheld
    Answer: There are so many contradictory statements being made by various officials of both the Ministry of Social Affairs and Labor and the Public Authority for Manpower that one is left wondering about the ground reality.

    Only about four months ago a Ministry of Social Affairs and Labor official said that expatriates on government project visas and factory visas could transfer their residence to the private sector – on completion of their projects – if their sponsors had no objection, on a payment of a KD 300 fees.

    What this official forgot to mention was this KD 300 fee was only for transfer from one government project, on its completion, to another government project which has a different sponsor. If you want to transfer to another government project of the same sponsor the fee will be KD 200. Now, here is another possibility.

    You can pay KD 350 to transfer your work permit, if you are on a government project, to the main file of the same sponsor. This would mean that you could land, if the sponsor wanted in the private sector.

    On the other hand, another official has said that “It’s now not a question of what your work status is or how long you have spent with the firm on a government project visa…instead what is being considered is whether you were hired for the project from abroad or you joined the firm on a local transfer”. This decision clarifies that laborers contracted on a government project locally from the private sector or transferring from dependent visas can transfer to other sponsors according to the previous conditions, which are:

    1. Conclusion of the project’s tenure

    2. Working for at least one year for the first sponsor 3. Getting the sponsor’s approval for transferring.

    So, this makes it very clear that if you transferred to this project locally from another sponsor / company then your transfer is allowed. In the end, as a result of the above decision, we would again like to stress that the best way to find out what’s the latest is by trying your luck…submit any application for the transfer … you might be lucky.

  • Inheritance

    How is inheritance (indemnity & bank accounts) dealt with under Kuwait Law, if a non-Muslim expatriate worker dies in Kuwait without a written will? Alternately, how to ensure that the assets of a non-Muslim expatriate worker are given to his family in case of his death in Kuwait?

    Name withheld
    Answer: It becomes a little difficult to claim both the indemnity and bank accounts if an expatriate, both Muslim and non-Muslim, dies in Kuwait without a will. But the legal system makes things easier for the claimants if you know “your way around”.

    First let’s deal with the easier part — claiming the indemnity. All you need is a letter from your country’s courts which clearly indicates who will inherit the dead expatriate’s assets. Once you have this judgement from the court, you have to get it attested from the Foreign Ministry in your country and then your embassy in Kuwait.

    On production of these papers, the company will pay the indemnity to person who has been named the “inheritor” in the court papers or to the person who is carrying a “power of attorney” from the heirs of the expatriate. But getting the money from the dead expatriate’s accounts is a different matter because all the bank accounts will be frozen on the expatriate’s death and the money can’t be transferred to any other account unless a Kuwait court authorizes such a transfer.

    To avoid this hassle, we have seen people withdrawing the money through the ATMs without informing the bank about the expatriate’s death. This is wrong and could result in legal complications for all those involved.

    So, armed with a decision from the court in your country, you have to approach a Kuwait court to retrieve the funds in the frozen bank accounts. Here you could run into complications but if you have a lawyer to guide you there won’t be any problems.

    First of all, the inheritors have to ask the court to address the issue according to the inheritance law of their own country and not that of Kuwait.

    Because if you don’t make this clear, the dead expatriate’s assets will be distributed according to the Islamic Sharia (law).This could result in a lot of difficulties because there would be multiple heirs — mother, wife, sons, daughters — in such an event.

    Once the court confirms that the inheritance papers are okay and that there are no other heirs, it will order the funds be released to the “inheritor” or to the person who has been a proper power of attorney by the “inheritor “ to follow the case. Please remember that you will be also required to clear all the dues of the deceased before the funds are released to you.

  • Transfer of Shepherds Visa

    I would like to know whether expatriates on camel shepherd visas or some other shepherd visas can transfer to another sponsor after one year according to the new law.

    Name withheld

    Answer: Yes, you can transfer to another company or sponsor if you were locally hired and have been with your current sponsor for at least one year. But there are some restrictions. You can’t transfer to a different line of work but only to a company or sponsor who also hires you as a shepherd. The government has restricted the transfer of all such expatriates who were hired as shepherds or on farms.

  • End of service benefits ( Indemnity & Leave Balance)

    I joined my company on 01-1- 1995. I resigned on 20-3-2016 and my last working day was 11-5- 2016. You are kindly requested to calculate my end of service benefits (monthly salary KD 300). Leave with pay I got until June 2013. I asked for a release also but employer is not agreeing to the same … in fact he told me to go back to India and then come back on a new visa/work permit. I can arrange a sponsor from a new company. So, you are kindly requested to give your advice what to do next.

    Name withheld

    Answer: Well, your sponsor is totally wrong. Nowadays, if you have even been hired from abroad and worked for a company for over three years, the Ministry of Social Affairs and Labor sanctions your transfer. Otherwise, if you join a company on a local transfer you can leave that firm after one year unless you sign a time-bound contract.

    As things stand, you have worked for this company for over 21 years and you can’t be stopped from transferring to another company, regardless of any reason. The law is on your side. If your sponsor insists on not giving you a release, you should approach the Ministry of Social Affairs and Labor or the Public Authority for Manpower through the Labor Office in your area.

    Seeing the years of service that you have put in this company, your transfer will quickly be sanctioned — without the permission of the current sponsor — to any other company which is willing to sponsor you. So, don’t worry about anything and file a complaint with the Labor Office if your sponsor doesn’t budge from his stand.

    Here is the calculation of your benefits:

    Indemnity Salary:
    KD 300 Service: 21 years 5 months

    For the first five years = 15 days pay for each year = 75 days pay

    But these 75 days have first to be divided by 26 (working days in a month = 2.88 months pay)

    For the remaining 16 years 5 months you get one month for each year = 16.42 months salary

    Total = 19.3 months pay

    But according to the Kuwait Labor you are entitled to a maximum of 18 months pay as indemnity unless the sponsor himself wishes to pay you more, so you will get 18 x KD 300 = KD 5,400 as indemnity

    You will get KD 5,400 (the full amount) and nothing can be deducted from this amount even if you have resigned because you have over 10 years service.

    Leave balance payment
    You last availed leave in June, 2013 which means you have balance of annual leave for two years 11 months.

    You are entitled to full leave for the last 11 months because you are entitled to 30 days every year, which means 11 months of work and 30 days paid leave every year.

    Therefore, you have 90 days leave balance But these 90 days have also to be divided first by 26 (working days in a month) and then multiplied by your salary = 3.46 x KD 300 = KD 1,038

    Please remember that the annual leave balance payment has to be calculated separately from the indemnity

    So, your total dues = KD 5,400 + KD 1,038 = KD 6,438

    Please remember one important fact. Your sponsor might say that you can accumulate only a maximum of two years leave and might try to cheat you out of one year’s leave payment.

    If the sponsor attempts to not pay the full amount, please draw his attention to the last para of Article 72 and Article 73 of the Kuwait Labor Law enacted on Feb 20, 2010.

    The last para of Article 72 says “The annual leave can be accumulated for more than two years with the consent of both the parties”.

    Article 73 says “Without prejudice to the provisions of Articles 70 & 71 (which talk about the entitlement and payment for annual leave), the worker shall be entitled to a cash consideration of “all his accumulated leaves” upon the expiry of his contract.

    This clearly means that if a worker has accumulated annual leave for any number of years e.g. 4, 10 or even 20 years, he must be paid for all the accumulated leave with all the calculations based on the last remuneration (according to Article 62 of the Kuwait Labor Law).

  • Illegal construction has closed my apartments window and A/C

    I am living in Hawally, on the ground floor of a certain building. Due to illegal construction my home windows and A/C have become totally closed now. I have a window A/C, which due to the illegal construction is not working properly. I kindly request you to please let me know as to who I should contact to solve my big problem.

    Name withheld
    Answer: Please remember that no landlord can make any extension to any building without the approval of Kuwait Municipality, which takes into consideration the fact that the rights of current building tenants are not compromised. All such construction has also to be done according to a certain plan approved by Kuwait Municipality.

    If the construction is illegal the landlord can face severe legal action. So, just report the matter to the Kuwait Municipality office in your area and it should take immediate action. If the Municipality for “some reason” — for which it has been criticized severely over the recent years — fails to take any action, just file a case against the landlord at the rents court.

    In such a case, don’t pay the landlord the rent but make sure to deposit it with the rents court in your area by the 20th of each month. This will not only put pressure on the landlord but also force him to stop the illegal construction. If other building tenants can join you in initiating against the landlord, then your case become all the stronger.

  • Loan transfer

    I have been working with an organization as an engineer for the past 2 years. I have a loan with one of the banks which I am due to pay installments for another few months.

    My questions are:

    1. If at all I get a good opportunity in another company somewhere in the GCC countries, is it possible to transfer the loan to another GCC country bank?

    2. Do I need to clear the loan before I get a transfer.

    Name withheld

    Answer: Theoretically, it is possible if this Kuwait bank has a branch in the Gulf country to which you are planning to transfer but practically it doesn’t happen because they are too many things tied to the acquiring of a loan.

    So, what we advise in such a case — in case you are travelling out to another country or transferring for whatever reason — is to transfer the loan to your guarantor or to some close friend, through an arrangement with the bank.

    This is possible and has been done in many cases. In such an event, your friend guarantees to pay the monthly installment and you can keep paying your friend through whatever arrangement you set up with him. And yes, you need to clear the loan — or transfer the liability to a friend — before you leave the country because the bank has the right to force the guarantor of the loan to pay the monthly installments and if he/she doesn’t then the bank can initiate legal action against the guarantor.

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