Our company includes bonus while calculating indemnity for employees in compliance with Kuwait Labour Law. The bonus amount varies each year.
My question is if an employee has been paid bonus for the past 10 years and during the 11th year if he was not paid any bonus, and if the employee leaves the company after completing 11 years, how is his indemnity to be calculated? Does include the bonus component or is it excluded? If included, what amount is to be taken into consideration since the last bonus was ‘0’?
Answer: If the employee leaves the company after the 11th year in which no bonus was paid, his indemnity would be paid taking into consideration the 10th year in which bonus was paid. In this case, you divide the latest bonus paid by 12 (number of months in a year) and add it to your monthly salary for the purpose of calculating the indemnity.
Source: Arab Times