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 status for a maximum of 100 days. However, the same employer cannot apply this more than once for each of their workers. Contracts that are still under probation can be terminated without prior notice by giving an accumulated compensation to the employee.
This can only be applied by the same employer once for each of their workers. Contracts that are still under the probation days 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.
According to new Labour Law, the salary should be paid before the 7th of each month, and salaries of all employees should be sent to their banks. All employees are eligible for paid leave on all official holidays, and a day off every week, and an annual leave of upto 30 days even during the first year of work.
According to Article 21, 21 days paid Haj pilgrimage leave should be granted to employees who have spent two consecutive years in service, under the same employer, and have never previously performed the Haj pilgrimage. Employees are also allowed leave on all 13 days of public holidays. In case workers are asked to work during these public holidays, a bonus of half-day’s salary should be given in addition to full day's pay.
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. An employee is eligible for sick leave of 40 days. This is inclusive of full pay for first 10 days, 75 percent pay for next 10 days, 50 percent pay for the following 10 days, and 25 percent pay for last 10 days. If an employee has consumed his 40 days of sick leave, he or she is still eligible for about 30 days of unpaid sick leave.
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.
Female Employees and Children
The new labour law prohibits employment of minors, or an individual below 15 years of age.
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.
An expecting mother is allowed to take a paid leave, lasting 70 days, provided, her due date for delivery falls within that period. New mothers can also apply for unpaid leave of upto four months. The law prohibits employers from terminating the contracts of female workers during this period, or if they are sick due to associated issues during delivery. Once the new mother gets back to work, she is granted 2 hours break from normal work hours to nurse her baby.
Employers who have 50 women or 200 men working in their establishments are required to set up a day care centre for children below four years of age.
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 three months in advance with proper reason stated by the employer, before breaking an employee’s contract. The same is applicable for the employee too. He/she should give a three-months notice to the employer before resigning from their current position. An employer is not allowed to terminate employees who are on leave, at present.
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.
An appropriate transport should be provided by the employer to his employees who are working in areas not covered by public transport. An accommodation with drinkable water, and a means to obtain supplies should also be provided by the employer if his employees are working in remote areas.
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.
According to Article 51 of Labour Law, a worker will receive end-of-service compensation in full at the end of contract period. This is equivalent to 10 days of pay for first five years, and from the sixth year it increases to 15 days pay.
The employee is eligible for full indemnity if the contract is terminated by the employer, or the contract ends without being renewed. A female employee can get full indemnity if she terminates the contract from her end due to marriage within a year from her marriage date.
Article 53 of the Labour Law states that employee who resigns from his work should still be paid a part of his compensation. For year of service, he deserves half month’s salary as compensation, but, this is given only to those who worked for more than three years and less than five years.
Seventy-five percent of monthly salary every year is given to employees who worked for more than five years but less than 10 years of service.
All employees who served for more than 10 years are given full month's salary as compensation for every year of service.
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