The recent decline in oil prices has caused some uncertainty among expat employees in Kuwait. Not only oil companies but other businesses have cost cut their budgets resulting in lessened benefits, worse taken away and worst, lay offs.
Following are relevant questions from expat employees. Attorney Fajer Ahmed answers;
Bankruptcy and termination
Question: My boss recently came to us and told us that because of bankruptcy/restructuring, a few hundred of us will be terminated on the spot without any notice . I do not know what that means. Can we be laid off because the company is losing money? And if so, so we still get our termination indemnity and other benefits?
Fajer: Although private companies have the right to terminate because of bankruptcy, bankruptcy should be a final verdict issued by the Kuwaiti counts as stated in Article 50 (a) of Kuwaiti labor law 6/2010:
“Article (50) The employment contract shall be deemed terminated in the following events:
a- If a final verdict was issued declaring bankruptcy of the employer;
b- If the establishment was permanently closed.
In the event where the establishment is sold, merged with another establishment or transferred by inheritance, donation or other legal action, the work contract shall remain valid under the same conditions and the obligations and rights of the original employer towards the workers shall be transferred to the employer who has taken his place.”
Now it is important to state that for those that have a contract with a fixed term (and not renewable, or only renewable with written approval), then a contract could end with the end of its term easily, with no consequences for either party. If the contract has a specified term, then the employer may terminate the employer but must pay him/her three months’ salary or have him/her work for another three months.
To be continued..
Source: Kuwait Times