Living in Kuwait
Kuwait Labour Law and Employment Contract
If you plan to work in Kuwait, or another foreign country, it is best to know their Labour Code. Knowing the do’s and don’ts in a country will allow you to take advantage of the benefits such as sick leave and vacation leave. Being aware of the law also prevents you from breaking the law at any point of time.
Kuwait Labour Law includes all essential rules and regulations that an employee needs to be aware of before accepting the job contract. However, it may be amended from time to time. Hence, these need to be verified constantly, and the laws mentioned herein should be considered only as a guideline.
Three main legal codes govern labour conditions in Kuwait. The employment conditions of civil servants are regulated by the Labour Law for Government employees. Those working in the oil industry are protected by the Labour Law of Oil Sector. Similarly those working in the private sector are governed by Labour Law of Private Sector. People in domestic services, such as chauffeurs and maids, are not governed by any particular code, and will have to depend on general principles of law.
Private Sector Labour Law
All labour regulations in private sector are enforced by Ministry of Social Affairs and Labour (MSAL). The law is applicable to all private sectors except the following – domestic servants, workers on temporary contractors and workers working in less than six months. The private sector labour law is also not applicable to employees whose head office is located outside Kuwait, unless the company has a branch office in Kuwait. Immigrants working in Kuwait will be governed by the private sector law of the country where their head office is located.
The written employment contract is to be signed before accepting any job in Kuwait. The contract will contain the employee’s terms of service. A fixed time or indefinite terms of service may be given by the employer to the employee. The term of service which does not exceed five years is considered a fixed time.
An employment contract gives a fair idea about the description of the job, date of appointment and service length (if fixed), and remuneration payable. Arabic is the medium of language used for written contracts. A contract translated into another language may be attached when resolving disputes, but, the court of law will take into consideration only the Arabic version.
An employee can be hired under probation for a maximum of 100 days. This is applicable by the same employer only once for each employee. Contracts that are under probationary period can be terminated without prior notice. An accumulated compensation will be given to the employee.
Remuneration & Deductions
Basic pay, commissions, incentives, obligatory bonuses, gratuities from third parties and employee benefits such as housing allowances are included in the remuneration. Allowances on account of expenses and profit shares are not part of remuneration. If the employee’s contract or the company by-laws include bonus payment, or if such an amount is paid regularly every year, the company is obliged to pay the workers’ bonus too.
The content of remuneration is important, because, in case of an injury, the amount mentioned in the remuneration will be used to compute the terminal compensation or indemnity. The payment may vary, for instance, if employee’s salary is paid based on number of working hours, the company will use the last salary payable.
No minimum wage is slated in the private sector labour law. A monthly salary should be paid for hired employees. Salaries can be given away every two weeks for piece-workers who work on hourly or weekly wages. An employer should prioritize payment of employees’ salaries and termination benefits over other creditors if the employer declares bankruptcy.
An employer cannot compel their employees to purchase products they manufacture or produce. If a worker is indebted to his employer, a deduction must not exceed 10 percent of his salary and interest may not be charged to the worker. When a third party debt is attached to employer’s salary, only 25% of employee salary should be deducted.
Eight hours a day and 48 hours a week is the required working hours for an adult worker. An employee must be allowed an hour rest or break after five consecutive hours of work. This one hour rest or break is not included in computation of working hours. MSAL can modify these standard working hours on case to case basis.
An employee has the liberty to enjoy one whole day off per week. The day off is without pay and is traditionally scheduled during Fridays. However, this is not a legal requirement in Kuwait. There are eight holidays in a year, where an employee is entitled to enjoy full payment. The holidays are as follows:
Hijri New Year’s Day (1 Day), Ascension Day (1 day), Eid Al Fitr (2 days), Eid Al Adha (2days), Prophet Mohammed Birthday (1 day), National Day (1 day). There is also a holiday for Liberation Day, but for private sector, it is not a statutory holiday.
Employees are allowed to take 14 whole days of leave annually for completion of one year of service, and 21 days of leave every year after five continuous years of service. These annual leave do not include sick leave and official holidays. The employer is given the power to schedule the date of employees leave. In case of employee’s termination of service, the employee is entitled to receive cash payment in lieu of accumulated leave. This is irrespective of the number of years of leave due. Payment for accumulated leave should be computed on the basis of last salary payable on termination date.
Sick Leave / Overtime
An employee is entitled to sick leave, subject to a satisfactory medical report. The first six days of illness the employee is given full pay, the next six days he will be on ¾ pay, the next six days on ½ pay, and the next six days on ¼ pay, and next six days without pay. The entitlement is one year and not for period of sickness.
An employee may be required to work overtime, provided, it is necessary and the employer's order is in writing. Overtime rates are 1.25 times the basic hourly rate for excess hours worked on ordinary days, 1.50 times the basic hourly rate for all hours worked on the weekly day off and twice the basic hourly rate for all hours worked on public holidays.
Overtime working is only permitted for maximum 90 days a year, and is limited to additional two hours a day, 6 hours a week and 180 hours a year. The employee has the right to refuse overtime work.
A woman should be paid equal remuneration for performing same work as a man. The standard working hours for women are the same as that for men. However, women may not work at night 8pm to 7am, except in clinics, hotels, pharmacies, nursery schools, homes for handicapped, airline and tourist offices, theatres and Entertainment City. They can work up to midnight in co-operative societies and public utilities, restaurants, beauty salons, banks, tailoring shops and offices. Employers are obliged to arrange transportation for women working at night.
A woman employee is granted maternity leave to a maximum of 30 days prior to delivery and 40 days after delivery on full pay. Therafter, she may absent from work without pay for up to 100 consecutive or non-consecutive days, provided, she presents a medical certificate stating that she is ill as a result of gestation and parturition.
Employment contract will automatically expire at the end of fixed period mentioned in the contract. If the contract is renewed by the employer, and if the employee is willing to work for another period then the same conditions will be applicable.
In case the contract does not state any conditions pertaining to termination of contract before end of fixed period, either party can terminate the contract. The party that terminates the contract should compensate the other.
If an employee has an employment contract with indefinite period, termination can be made by informing the other party in writing. The notification should be given 15 days before the termination. In lieu of notice, either party may pay the other an amount equivalent to 15 to 7 day salary.
If the employee commits any sins such as doing wrongful act, always disobey employer’s instructions, disobeys safety instructions at work, takes leave without any reason for seven consecutive days, convicted of crime affecting honour and morality, commits act against public ethics in work place, assaults fellow employee, fails to perform obligations under terms of his contract, commits fraudulent activities, or reveals company secrets, the employer has the right to terminate such an employee without prior notice and without paying the employee’s indemnity and compensation.
On the other hand, if the employer commits any acts such as failing to abide by provisions slated on employment contract, assaults his employee, endangers employee’s health, an employee has the right to end contract prior to its expiry and without prior notice, and can collect his indemnity and no payment for compensation to employer will be applicable.
In the event of death of an employee, or if employee fails to perform his work, or uses up all his sick leaves, his contract will automatically be terminated. However, Indemnity will be paid.
An employment contract will also get automatically terminated if his company goes into liquidation, merges with another firm, experiences lockout, or is sold or inherited. The new owner then has the right to indemnity while employees may continue to serve the new owner while reserving his rights to indemnity for his previous service.
A lump sum payment also known as termination compensation is given to employees when the employment is terminated. For those who have worked less than five years for each year completed by workers, they are entitled to termination indemnity equivalent to 15 days compensation for every year completed. But, it may be limited to one and a half year’s remigration, if the employee works for more than five years.
In the case of employees who are paid based on piece-rate, hourly, daily or weekly, a termination indemnity of 10 days compensation for each completed year of service is obtained for the first five years, and 15 days salary payment is given for each completed year for more than five years. In case where part years and pro-rated amount is calculated, this is limited to one year’s salary.
An employee who is unable to complete five years of service will not be entitled to any indemnity, once he decides to resign. Employees who resign after working for five years or more in the company, will be given 50% indemnity. Employees who have reached their retirement age, are disabled at work, or died, are given full indemnity. A full indemnity is given to women employees who may while being an employee, and women employees who render resignation within six months of marriage.
Health & Safety
Employers are obliged to take precautions to protect their employees against physical hazards and occupational diseases at work. They are required to ensure that their work places are clean, well ventilated, and in sanitary condition. Employers are required to supply first aid kits containing medicines, antiseptics and bandages and place within visible reach of employees.
Disciplinary Notices & Penalties
All related regulations for employees need to be issued in a form of circulars or bulletins. The regulations need to be written in Arabic. Employees who have committed offense may be penalized if the regulation specifies that the offensive act is punishable. All penalties need to be progressive, but, limited, like for instance, every act of misbehavior is equivalent to one punishment. If the misbehavior is committed after work hours and outside the workplace, and is not related to work, no penalty will be imposed, and so on.
If the penalty is salary deduction, it should not exceed 5 days a month. If the penalty exceeds total amount of employee’s five days salary, then another 5 days deduction will be imposed on next salary. If the penalty is suspension from duty, it should not exceed 10 days a month. If the act of misbehavior has been proven after 15 days, a penalty cannot be imposed.
If an employee is injured at work, the employer should report the matter to local police station and MSAL. The injured employee has the right to treatment at employer's expense in any government hospital or private clinic, whichever the employee considers suitable. A doctor's report stating treatment period required, disability arising out of accident and fitness to continue to work need to be obtained.
An employee is entitled to compensation for injuries pertaining to work. An employee’s family is entitled to compensation if the employee is not guilty of malpractice or intentional injury. The employee’s family has the right to claim compensation if the employee’s injuries have caused him more than 25% disability or dies. Even if the employee is guilty of gross malpractice, the family will still be compensated.
The amount of compensation is based on severity of the injury. If the injury results in death, total amount of 1500 days salary or more is given. The current legal blood money is KD10,000. Employees with permanent disability will be compensated to the total amount of 2000 days salary or more. One and one-third times the legal blood money will also be provided.
Trade Unions and Dispute Resolutions
Trade Unions formation and activities are strictly controlled. Only one union is allowed to be established for workers in any profession. An employee is not allowed to join in more than one union. For immigrants, a valid work permit and Kuwait work experience of more than five years is a requisite to become a union member.
In case of disputes between employer and some of his employees relating to work, direct negotiations should be first tried out, and an agreement should be in place. It should then be registered with MSAL within seven days. If there is no such deal, MSAL will be requested to intervene by both parties. If the dispute is not settled within 15 days by MSAL, the dispute is then forwarded to Labour Disputes Arbitration Committee in the courts. Each party is permitted to have maximum of three representatives, and any decision made by committee in this regard, is final and binding.
Some tips for expats
- Ensure that employment contract is in writing.
- Cross verify the salary indicated in the employment contract, with that in work permit, as in the event of dispute, MSAL may rely on work permit.
- Keep records of salary and other payments.
- It is illegal for expats to work in Kuwait, except in work visa and for their own sponsor. Part-time work requires special permit.
- Employer cannot cancel an employee’s residence unless all dues and indemnities have been paid in full.
- An employer cannot give notice of termination when an employee is sick or injured.
- In case of dispute, seek legal advice.
- Keep photocopies of all documents, including work permit.
- In case of any need, here are contact details of MSAL departments
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