Navigating the complexities of resignation, termination, and indemnity in Kuwait’s labor market can be overwhelming for both employees and employers. Whether you're leaving your job voluntarily or facing termination, understanding the legal framework governing indemnity is crucial for securing your financial entitlements. Kuwait’s Labor Law lays out detailed guidelines for calculating indemnity, but the rules differ depending on the nature of your departure—resignation, voluntary exit, or termination by the employer.

This legal clinic advice aims to clarify the different scenarios, the process of claiming indemnity, and the steps you need to take to ensure that your rights are fully protected, even in the event of employer delays or disputes. If you're navigating this process, whether voluntarily leaving or involuntarily terminated, this guide will help you understand your options and the legal procedures you need to follow.

 General Rules for Indemnity on Resignation (Article 53):

Examples of Indemnity Calculation

Scenario Example:

·  First 5 years: 15 days of salary per year

·  After 5 years: 1 month's salary for each additional year (In this case, 1 year beyond 5)

Calculate 15 days' salary

· To get daily salary: KD 500 ÷ 26 = KD 19.23 (26 working days in a month)

·  15 days' salary = 19.23 × 15 = KD 288.45

·  So, for the first 5 years: KD 288.45 × 5 = KD 1,442.25

Calculate 1 month's salary for the 6th year

That’s just the monthly salary: KD 500

Total Indemnity before applying resignation reduction

KD 1,442.25 (first 5 years) + KD 500 (6th year) = KD 1,942.25

Apply resignation reduction (2/3 entitlement for 5–10 years)

2/3 × KD 1,942.25 = KD 1,294.83 (Final Payable Amount)

When an employee is terminated by the employer in Kuwait (without cause), the indemnity rules are more favorable to the employee than in the case of resignation.

Here's a clear breakdown based on Kuwait Labor Law No. 6 of 2010, specifically Article 51:

Indemnity When Employee is Terminated (Without Misconduct)

Employee is entitled to full indemnity, regardless of the number of years worked.

 How Indemnity is Calculated (for monthly-paid employees):

Example Scenario:

Step 1: Daily Wage: KD 600 ÷ 26 = KD 23.08

Step 2: First 5 years: 15 days/year × 5 = 75 days → 75 × 23.08 = KD 1,731

Step 3: Next 3 years: 1 month’s wage × 3 = KD 600 × 3 = KD 1,800

Step 4: Total Indemnity: KD 1,731 + KD 1,800 = KD 3,531

 No Deductions or Reductions Apply

Since the employee did not resign and was not terminated for cause, the full indemnity is payable.

For Employees who are terminated for misconduct or breach of contract they may lose their right to indemnity entirely, depending on the severity and the specific grounds for termination.

Termination for Misconduct or Fraud — Kuwait Labor Law:

According to Article 41 of the Kuwait Labor Law (Law No. 6 of 2010), an employer can terminate an employee without notice or indemnity in cases of:

Serious Misconduct, including:

Step-by-Step Guide to Claim Indemnity (Leaving Kuwait for Good)

Step 1: Finalize Employment Exit

Step 2: Cancel Residency (Iqama)

Step 3: Calculate Indemnity

Step 4: Request Final Settlement

This includes:

Ask HR to provide a final settlement sheet and clearance form.

Step 5: Get Clearance & Exit Documents

What to Do If Your Employer Doesn’t Pay Indemnity in Kuwait

1. Try to Resolve Amicably (if possible)

2. File a Complaint with the Ministry of Social Affairs and Labor (MSAL)

Where:

What to bring:

What happens:

3. File a Case in Labor Court

4. Exit Kuwait Without Losing Right to Claim

If you're leaving the country:

 5. Raise Awareness or Pressure (last resort)

If the Employer Refuses to Pay: Enforcement Action Begins

The employee (or their lawyer/representative) can initiate execution procedures (called Tanfeeth in Arabic) through the Execution Court.

The Execution Court can:

 Note: This process can be slow, especially if the company is stalling, has no liquid assets, or has closed operations.

  Important Notes:

1. Termination by Employer with Just Cause (Article 41)

The employer may terminate the employee without notice or indemnity if the employee:

·       Commits a grave mistake causing significant loss.

·       Violates company policies or contract terms repeatedly.

·       Is found intoxicated or commits an immoral act during work.

·       Assaults the employer or colleagues.

·       Fails to perform duties despite written warning.

·       Works or shares information to competitors

·       Fraud / Embezzlement

2. Termination by Employer Without Just Cause

If no valid reason exists, the employer must provide:

·       Notice period (usually 3 months for monthly paid employees).

·       End-of-service indemnity.

·       Compensation for arbitrary dismissal if proven.

3. Resignation by Employee with Just Cause (Article 48)

The employee may leave without notice and still claim indemnity if:

·       The employer breaches the contract.

·       The workplace is unsafe.

·       The employee is assaulted or treated inhumanely.

4. Termination / Resignation by Mutual Consent

·       Both parties agree to end the contract.

·       Terms (like notice period or indemnity) can be mutually negotiated.

5. Termination Upon Expiry of Fixed-Term Contract

·       If not renewed, the contract ends automatically.

·       The employee may still be entitled to end-of-service benefits.

6. Termination Due to Force Majeure or Business Closure

In case of shutdowns (natural disasters, bankruptcy), termination may occur with compensation depending on the case.

Voluntary Resignation by Employee – What steps should be followed

If the Employee Resigns (Voluntary Resignation)

Step-by-Step Visa Transfer Process:

The new employer applies to the Ministry of Social Affairs and Labor (MOSAL) for a new work permit.

If the Employee is Terminated (Involuntary Termination)

Step-by-Step Visa Transfer Process:

Important Notes:

Employer Refusal: If the employer refuses to release the employee, the case may go to the Labor Court or Ministry of Labor, especially if the employee has completed 3 years of service (common threshold for unrestricted transfers).

Article 18 visa holders (private sector) generally have more flexibility in transferring visas.

Blacklist Risk: If an employee leaves without permission or proper clearance, the old sponsor can block the transfer, which may result in a ban.

Step-by-Step Process After Resigning and Returning Home

1.     Submit Resignation and Complete Exit Formalities

·       Give proper notice period (usually 90 days, unless otherwise stated in the contract).

·       Ensure all dues are settled (salary, indemnity, leave, etc.).

·       Get a clearance letter or end-of-service certificate.

·       Employer cancels the residency (visa) before you leave (Temporary Residence upto 3 months is stamped to finish all formalities).

·       Get clearance of electricity/telephone bill paid and no bank loans are pending

·       Complete fingerprint clearance (exit process at Immigration).

·       Leave Kuwait legally.

Important: Ensure there are no absconding or legal cases filed against you. These can block your exit and re-entry.

2. Secure a Job Offer from a New Company in Kuwait (Those who wish to return)

Once in your home country, find a new employer in Kuwait willing to hire and sponsor you.

Kindly note the employer should have a valid work permit quota approved by the Ministry of Social Affairs and Labor (MOSAL).

 3. Employer Applies for a Work Visa in Kuwait

The new employer must:

·       Submit your documents to MOSAL, including: - Copy of your passport - Academic and professional certificates (attested) - Job offer and contract - Get a work permit approved. - Apply for visa issuance (Article 18 – Private Sector) at the Ministry of Interior.

4. Receive Work Visa in Home Country

·       The employer sends the visa details or work visa number to you.

·       Take this to the Kuwaiti embassy or visa processing center in your country. Submit: - Medical certificate (from an authorized medical center by Kuwait Embassy) - Police clearance certificate (PCC) - Passport, photos, etc. - In some countries, this process goes through agencies approved by the Kuwait government.

5. Travel to Kuwait on New Visa

Once the visa is stamped and medical is approved, you can fly to Kuwait.

You’ll enter on a temporary work visa that needs to be converted. (You will have 90 days to terminate the contract and return to your country if you don’t like the job)

6. Finalize Residency in Kuwait

·       After arriving: - Undergo fingerprinting and medical check (in Kuwait). - Submit documents to Immigration for final residency stamping. - Get your Civil ID issued.

You are now officially working under the new employer’s sponsorship.

Key Tips:

Blacklist Check: Make sure your previous employer didn’t blacklist or block you. If they did, your new visa may be rejected.

Waiting Period: Usually no mandatory waiting period to return to Kuwait unless the previous employer filed a case.

Contract Compliance: Complete your notice period and exit cleanly to avoid problems returning.

Exiting Process: Ensure that you have formally exited Kuwait by cancelling your residency permit, rather than allowing your visa to be automatically cancelled after six months of absence. (In below details shows step by step guide if your new employer cannot apply for a visa)

If an employee resigns and leaves Kuwait but later discovers that their residency (iqama) was never officially cancelled in the Ministry of Interior’s system, it can create complications. Specifically, when a new employer attempts to process a work visa under Article 18, the system may block the application because it still shows the employee as "residing" in Kuwait under their previous sponsor.

Here’s what you can do in this situation:

What to Do If Your Visa Was Not Cancelled After Leaving Kuwait

1. Confirm the Status in the System

·       Ask the new employer or a visa typing center in Kuwait to check your residency status in the Ministry of Interior (MOI) system using your passport number or old civil ID number.

·       If your name still appears as “under residency,” it means your iqama was not properly cancelled.

2. Contact the Previous Employer

·       The fastest solution is to directly request the previous employer (old sponsor) to: Cancel the residency in the MOI system, and Remove any blocks or restrictions.

(This usually requires them to visit the Jawazat (Immigration Dept) with your file and submit a formal cancellation request.)

3. Provide Proof of Exit

If the employer is uncooperative or unreachable, the new employer (or a legal agent on your behalf) can try to cancel the old residency using your exit record.

They must go to:

·       General Administration of Residency Affairs (Immigration Dept)

·       Bring: A copy of your exit stamp in the passport (proving you left the country) Your passport copy Possibly a signed letter from the new employer

They may request to “cancel the old file due to departure.”

 4. Appointing a Legal Representative (Optional)

·       If you're outside Kuwait, you can give power of attorney to someone in Kuwait (often the new employer’s PRO or a lawyer) to handle this on your behalf. The POA should: - Be attested by the Kuwaiti Embassy in your country - Clearly authorize the representative to act on your behalf for immigration matters

5. File a Request with MOI or Labor Dept

If the old sponsor is refusing to cooperate or deliberately blocking your transfer, the new employer can raise the issue at the:

- Ministry of Interior (MOI) – Residency Violations Section - Public Authority of Manpower (PAM) – especially if the employee completed the contract and left legally

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