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Final Settlement With Leave Balance Category: Legal
Kuwaitlocal Kuwaitlocal

First of all, thanks for all the valuable advice — according to the Kuwait Labor Law — that you have been providing to the readers of the Arab Times.

1) I would like to know which of my allowances will be included in the calculation of my indemnity … the details are as below. As per my contract, my basic salary is KD 650, food allowance KD 130 and fixed extra work allowance is KD 200 per month. Accommodation and transport are provided by company.

2) I have resigned after completing 4 years but I have requested the company to let me leave with a two-month notice instead of three months as required by the law. Hence I have to pay one month’s salary to my company. So I have to pay back to company only my basic salary (KD 650) or the basic salary plus the allowances (650 + 130 + 200)?

3) I have 45 days leave balance, so all together how much will I get as the final settlement?

Name withheld

Answer: In the calculation of the indemnity, all the allowances that you receive at regular intervals are counted in the calculation of the indemnity. According to the Kuwait Labor Law, the calculation for indemnity and annual leave is based on the “remuneration” — which includes the basic salary and all the allowances — and not on the basic salary alone.

You will have also add the monthly value for the accommodation and transport, even if it is being provided by the company.

This is part of your salary package. But please remember that the payment for overtime work is not considered in the calculations. As regards your second question, you will have to pay the basic salary and the food allowance plus the cost of the one months accommodation plus transport (KD 650 + KD 130 + the cost of the facilities provided by the company) if you don’t serve one month of the three-month notice period.

Please also remember that you can get away with not serving the whole three-month or a part of it only if the company accepts your request.

If the company decides not to accept your request, then you will have to serve the whole three-month notice period and you can’t get away without their acceptance — even if you pay for the incompleted part of the notice period.

Otherwise, the Ministry of Social Affairs and Labor will not sanction your transfer. And in reply to your final question, we would like to say that we can’t make the calculations because we don’t have all the figures — cost of the accommodation and transport provided to you by the company.

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

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