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Kuwait may legalize salary cuts in private sector on mutual consent

05 May 2020

The Kuwait Cabinet has approved key amendments to the labour law in private sector, allowing employers to reduce salaries based on mutual consent with employees. However, MPs warned the government against any legislative changes that could undermine the rights of Kuwaiti nationals employed in the private sector.

The MPs said that they will strongly oppose any initiative to change the allow that allows reducing salaries of Kuwaitis in private sector. The lawmakers however, did not mention anything about expat employees, constituting 97 percent of the private sector workforce.

The current labour law amended in 2010, says companies have no right whatsoever to reduce the salaries of their staff without their consent, and any such action will be considered null or void by Kuwaiti courts. Therefore, the only option for companies is to terminate the services of their staff, pay full indemnity and benefits and then reappoint them on fresh wages.

salary cuts

Now, MP Ahmad Al-Fadhl said that he will submit a draft law that allows a compromise – in order to allow employees to keep their jobs and for the companies to keep their employees. The amendment stipulates to legalize salary deductions only if the companies and their staff arrive at an agreement on this matter.

Several private sector firms have already sacked some of their employees, have done salary deductions of others, and compelled others to take unpaid leave or take their annual leaves early.

Robin Vinod

Writer/blogger who writes on topics such as travel, real estate, employment and everyday life on GCC countries.

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