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Indemnity Case Won But Company Shut Down Category: Legal
Kuwaitlocal Kuwaitlocal

I had filed a case against my employer which happens to be a private limited company for non-payment of indemnity, which was due to me when I resigned.

By Allah’s grace and thanks to my lawyer’s efforts, I got the judgement in my favor wherein the company had to pay me my 9 years of service indemnity and accrued leave balances.

However, by the time I received the court’s judgement, the company had shut down with all its assets sold. I gather that since this is a private limited company, the liability of this company is limited only to the company and not to the owners or shareholders.

Incidentally, the manager of this company also happens to be the owner as well and the company file is still active in the Chamber of Commerce.

I am led to believe that the company now does not hold any account with any bank for us to recover the indemnity. I have won the case but I still feel I have lost as I cannot recover my right. May I ask the Legal Clinic to provide me any solution, if any?

Name withheld 
Answer: To answer your question we must take a close look at Article 50 of the Kuwait Labor Law for the Private sector which was enacted on Feb 20, 2010.

The work contract shall expire in the following cases:

a) Issuance of a final court judgment that declares the bankruptcy of the employer.

b) The final closure of the firm.

However, if the firm is sold or merged in another firm or if it is transferred by the means of inheritance, donation or any other legal action, the work contract shall be effective on the successors under the same conditions mentioned therein.

The rights and obligations of the previous employer towards the laborers shall be transferred to the employer who replaces him.

So, you can see that the people or company which bought the assets of the firm inherit the liability of paying the dues or benefits of all the employees regardless of the fact your company was a private limited company or otherwise. So, file a case with the Labor Office in your area against both the current owners of the company’s assets and the previous owners of the company. There is only one solution to this case – you will get your dues.

Source - Arab Times

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

Report 0 22 Apr, 2016, 02:53 PM
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22 Apr, 2016, 02:53 PM
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