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Kuwait

January 15, 2021

By Gordon Barr, Ghazal Hawamdeh and Samir Kantaria

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Kuwait

KEY DEVELOPMENTS FOR 2021


 

Restrictions on the transfer of employees

Administrative Resolution no. 529/2020 for amending Resolution no. 842/2015 regarding the terms and conditions of transferring an employee from one employer to another one has prohibited the transfer of work permits from the government sector to the private sector. All spouses and children of Kuwaiti women and the wives of Kuwaiti and Palestinian women, who have documents in line with technical professions specialised in the health field and have licenses to practice are excluded from this prohibition. This also includes medical professionals in the Ministry of Health, provided that the nature of their work is related to the health field, such as doctors, nursing staff, and others who practice medical specialties according to the procedures in force at the Ministry of Health.


 

Implications of work visas on businesses

In light of the pandemic, there has been a halt on the issuance of new work visas resulting in a halt on foreign recruitment. Although the Government has slowly begun to assess visa applications for a certain list of professions (not known to the public as of yet), there is no indication as to when the Government and the immigration authorities will revert to their visa issuance status pre‑COVID. The effects of this can be seen across business in Kuwait, who are experiencing a shortage of manpower due to their inability to recruit from abroad. Having said this, there are talks within business councils in Kuwait regarding the necessity for amending the Kuwait Labour Law to accommodate to future economic hardship in order to avoid hardships such as lack of manpower. However, it cannot be said with certainty whether or not the Kuwaiti Government will consider amending the law.

With thanks to Gordon Barr, Ghazal Hawamdeh and Samir Kantaria of Al Tamimi & Company for their invaluable collaboration on this update.

 

KEY DEVELOPMENTS FOR 2018


 

No Deductions for Pension Contributions

On termination, an employee is entitled to the full end of service indemnity without deducting the contributions made by the employer towards the Public Institution for Social Security (“PIFSS”). Previously, some employers used to deduct the amount that they had contributed towards social security from their employee’s end of service pay out, but this practice is no longer permitted.


 

Annual Leave Entitlements

Previously, the Labour Law did not specifically state that weekends, public holidays and sick leave days were not counted as part of annual leave and employers were therefore more inclined to give 30 calendar days’ leave.

However, weekends, public holidays and sick leave days shall no longer be counted as part of annual holidays, and employees have the right to 30-days’ paid annual leave in the first year of service provided they have been employed for at least six months.


 

Domestic Workers

The Kuwaiti government now anticipates reforming the method in which work permits are granted to domestic workers, taking into account the most balanced solution for both employers and employees alike. In addition, the government wishes to ensure safe channels for domestic workers to seek help from the Kuwaiti government when required. It is unclear as to when such changes will take place.

 

KEY DEVELOPMENTS FOR 2016


 

All employees required to sign a new standard form employment contract

A new standard form employment contract called the Unified Employment Contract has been introduced which includes 16 standard clauses.


 

Ability for employees to transfer jobs without the permission of employers

Where an employee has worked with an employer for three years (beginning with the date of issue of the work permit), the employee is free to move jobs provided he serves his notice period (which, for those employed on a permanent employment contract, will be such notice as the employment contract provides). Employees on fixed term contracts will have to complete the remainder of the contract before being able to move jobs.


 

Various legislative changes

Where an employee has worked with an employer for three years (beginning with the date of issue of the work permit), the employee is free to move jobs provided he serves his notice period (which, for those employed on a permanent employment contract, will be such notice as the employment contract provides). Employees on fixed term contracts will have to complete the remainder of the contract before being able to move jobs.

  • All employers (save in respect of certain exempt industries) with five or more employees must pay salaries to employees’ accounts with local financial institutions and the Public Authority for Manpower may request a copy of the statements of payments
  • Companies which bring in expatriate employees to Kuwait and then fail to provide them with employment or find that there is no actual need for the employee may now be fined and the employer shall bear the expenses of the repatriation ticket. If the employee stops working for the employer without proper notice and joins another company the new company will be liable to pay for the repatriation of the employee once the original employer reports that the employee has been absent from work. The fines have increased to KD 2,000 – KD 10,000 and could result in imprisonment of up to three years.
  • Various fines and penalties may be imposed where an employer does not:
    • Take proper safety measures to protect its employees;
    • Instruct the employee of the risks and warnings associated with his work; or
    • Protect the employee from work hazards (such as health damage and occupational diseases that may arise from the performance of the work).
  • The Ministry can partially or completely close the premises or suspend the use of a specific machine or machines until the violation is remedied. The fines and penalties for violation of closures have increased to KD 500 to KD 2,000 and/or imprisonment for one to six months.
With thanks to Gordon Barr and Roxanne Vesuvala of Al Tamimi & Company for their invaluable collaboration on this update.

Contributors

Image: Suzanne Horne
Suzanne Horne
Partner, Employment Law Department

Image: Kirsty Devine
Kirsty Devine
Associate, Employment Law Department

Image: Aashna Parekh
Aashna Parekh
Associate, Employment Law Department

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