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Understanding Employment Termination in Kuwait
Whether you are resigning, being made redundant, or your fixed-term contract is ending, the rules around termination of employment in Kuwait directly affect your financial and legal position. Kuwait's Law No. 6 of 2010 sets out the framework for lawful termination and the compensation you are entitled to receive.
These rules apply to all private sector workers in Kuwait, including expats — regardless of nationality.
Types of Employment Contracts and How Termination Works
Fixed-Term Contracts
- Last a minimum of one year and a maximum of five years.
- When a fixed-term contract ends naturally, neither party is required to give notice — the contract simply expires.
- Both parties can mutually agree to renew the contract at the end of its term.
- If either party ends the contract before its expiry date without a lawful reason, the terminating party may owe compensation to the other.
Indefinite-Term Contracts
- Have no fixed end date.
- Either party can terminate by giving proper notice as required by law or contract.
- The notice period and compensation rules are more complex and are supplemented by ministerial decisions.
Notice Periods
For indefinite-term contracts, both the employer and employee must give notice before termination. The required notice period is determined by the law and your contract. Key points:
- Notice must generally be given in writing.
- During the notice period, your employment continues and you remain entitled to your full salary and benefits.
- Your employer cannot reduce your salary or change your working conditions during the notice period as a way of pressuring you to leave.
- If your employer terminates you without giving proper notice, you are entitled to pay in lieu of notice — equivalent to what you would have earned during the notice period.
Unlawful Termination
Not every dismissal is lawful. Kuwait law protects workers from arbitrary or discriminatory termination. Unlawful termination includes:
- Dismissal without a valid reason.
- Termination because you filed a complaint against your employer or asserted your legal rights.
- Dismissing a pregnant woman or a woman on maternity leave — this is explicitly prohibited by law.
- Dismissal based on discriminatory grounds.
If you believe you have been unlawfully dismissed, you can file a complaint with the Public Authority for Manpower (PAM) and, if necessary, pursue a claim through the labour courts.
End-of-Service Gratuity (مكافأة نهاية الخدمة)
One of the most financially significant rights for expats in Kuwait is the end-of-service gratuity. This is a lump-sum payment made to a worker at the end of their employment, based on their length of service.
Who Is Entitled?
Most private sector workers — including expats — are entitled to end-of-service gratuity if they have completed at least one year of continuous service.
How Is It Calculated?
The gratuity is calculated based on your basic wage (not your total package including allowances, unless your contract specifies otherwise) and your years of service. The standard formula under Kuwaiti law is:
- 15 days' basic wage for each of the first five years of service.
- 1 month's basic wage for each year beyond five years.
Example: If your monthly basic wage is KD 400 and you have worked for 7 years: - First 5 years: 5 × (15/30 × 400) = 5 × KD 200 = KD 1,000 - Next 2 years: 2 × KD 400 = KD 800 - Total gratuity: KD 1,800
Important Gratuity Rules
- Gratuity is calculated on your basic wage, not your total remuneration — know the difference in your contract.
- If you resign, you may still be entitled to gratuity, though the amount can vary depending on how long you served.
- If you are dismissed without cause, you are entitled to full gratuity plus any additional compensation.
- Gratuity must be paid at the time of termination — your employer cannot unreasonably delay this payment.
- Any period of unpaid leave may reduce your gratuity entitlement proportionally.
Apprentices and Termination
For vocational apprentices, special termination rules apply:
- The employer can terminate the apprenticeship if the apprentice repeatedly fails their duties or shows no aptitude for learning.
- The apprentice can also choose to end the contract.
- Either party must give at least 7 days' written notice before terminating an apprenticeship contract.
Post-Training Work Obligations and Termination
If your employer paid for vocational training or an apprenticeship, you are obligated to work for them for a period equal to the training duration (up to a maximum of five years) after completing the program.
- If you leave before fulfilling this obligation, your employer can claim back a proportional share of training costs.
- Plan your career moves carefully if you have received employer-funded training.
Practical Checklist for Expats Facing Termination
- Check your contract for the specific notice period and any termination clauses.
- Calculate your entitlement — use your basic wage and years of service to estimate your gratuity.
- Request termination in writing from your employer, including the reason for dismissal.
- Ensure your final pay includes outstanding wages, accrued leave pay, notice pay (if applicable), and end-of-service gratuity.
- Do not sign any document releasing your employer from obligations without fully understanding what you are signing.
- If you are owed money, file a complaint with the Public Authority for Manpower (PAM) promptly — there are time limits on claims.
- Seek advice from a Kuwait labour law attorney if your situation is complex or involves large sums.
Where to Get Help
- Public Authority for Manpower (PAM): First point of contact for all private sector labour disputes.
- Kuwait Labour Courts: For unresolved disputes that require judicial intervention.
- Your embassy or consulate: Can provide referrals to legal aid or reputable labour lawyers if needed.
Knowing your termination rights before you need them puts you in a far stronger position to protect yourself and secure what you are legally owed.