Atty. Fajer Ahmed continues to answer questions from expat employees;
Rehired by contractor
Question: My boss said that he is going to lay us off and then we shall be rehired by a contractor and therefore lose our benefits. Is this legal?
Fajer: This is a very tough question to be honest with you and I think lawyers (depending on which side they are representing) have different thoughts on the issue. Some (and I personally believe so) say that you are still technically working for the same employer and therefore this seems deceiving to the law, that aims to protect the employee.
Employers are towards this way because they cannot legally reduce an employee’s salary as stated in Article 28 of Kuwait Labor Law 5/2010, “Regardless of whether the work contract is for a specific of indefinite term, the remuneration of the worker may not be reduced during the contract validity period. Any agreement to the contrary, whether made before or after the effective date of the contract, shall be deemed null and void because this matter is related to the general order.”
Employers also cannot take away an employee’s benefits that are either agreed upon in the employment contract or are constantly given to the employee. I will give an example. If you have been receiving every year a ticket, then a ticket is obligatory. If you have been receiving a bonus only on the years that the company is profiting, than your bonus is not obligatory.
Other lawyers say that if both parties have agreed to the termination and ‘rehiring’ by the contractor, and there was consent from both parties then it is legal. I have my doubts on whether the above argument will hold up in court, but to be completely honest with my readers, I do not have experience with a situation that is similar.
Regardless, the employee should be paid ALL of his/her benefits, rights, and termination indemnity when the contract is ended and before the employee is “rehired” by the contractor!
I also plead to employers to think about the consequences of such behavior and to be compassionate towards their employees, to treat them as humans and not as just another number. I know that companies are commercial entities and that in order to survive, the economy cuts have to be made, but let them be done with compassion, with thought. Let them be done with a thank you.
I apologize to my readers that some of my information is being repeated, but I find it vital, in these times to repeat to my readers their rights.
Source: Kuwait Times