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MP Mohammed Al Maarafi has proposed an amendment to the Labour Law for the private sector so that an employer and foreign worker can determine the leaving indemnity and write it in the employment contract.
The amendment to Article 116 of the Law specifies “A worker who is not subject to the provisions of the Social Insurance Law shall be entitled upon the termination of his employment to a leaving indemnity at a rate as may be agreed by the employer and worker and mentioned in the employment contract.
If there is no such agreement, a worker who is not subject to the provisions of the Social Insurance Law shall be entitled upon the termination of his employment to a leaving indemnity at the rate of half a month’s wage for each of the first three years of employment and one month’s wage for each of the following years in service.
A worker shall be entitled to receive his leaving indemnity for fractions of the year in proportion to the period spent at the employer’s service.”
MP Al Maarafi told our sister paper Akhbar Al Khaleej that the proposal aims to afford flexibility to both the worker and employer in determining the amount and conditions of the leaving indemnity.
It will help reduce the financial burden on employers especially those operating in sectors that require the employment of large numbers of workers who are not covered by the Social Insurance Law.
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