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End Of Service Benefits - Indemnity And Leave Balance Category: Legal
Kuwaitlocal Kuwaitlocal

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).

Source - Arab Times

Note - All the answers were provided by Arab Times Legal Clinic.

Report 1 04 Jun, 2016, 02:22 PM
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04 Jun, 2016, 02:22 PM
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