Increase in annual leave poses danger to economy

Proposed amendments to the labor law that raise the annual leave for private-sector employees to 35 days poses a threat to Kuwait’s economy, especially to its small and medium enterprises (SME), said the President of Kuwait Chamber of Commerce and Industry (KCCI) Ali Al-Ghanem.

Speaking before the 55th General Assembly of KCCI, Al-Ghanem stated that SMEs, committed by law to hire Kuwaitis in their workforce, will be negatively impacted by cost increases from the proposed labor law amendments.

It will be recalled that following pressure from the business community and the government, the National Assembly’s Health and Labor committee had last week rescinded its earlier approval of increasing the annual leave for private sector employees to 35 days. The amendment had been approved by the committee about two months ago and then passed by the National Assembly in the first reading last month. The Assembly was due to pass the amendment in the second and final reading more than three weeks ago, but the government delayed the vote.

The government informed the committee that the proposed amendment harmed the interests of Kuwaiti businessmen against a minor benefit to a small number of Kuwaitis employed in the private sector. The overwhelming majority of employees in the private sector are foreigners, who would have been the main beneficiaries of the amendment.

“Allowing more than 1.7 million non-Kuwaiti workers to get advantages and exceptional conditions under the pretext of attracting Kuwaiti labor to the private sector is unjustified,” said Al-Ghanem. “It is clear that the proposed amendment viewed the private sector through its stronger establishments, such as banks and telecommunication companies. But it is SMEs that form over 90-percent of private sector and these firms did not have the financial resources to meet the cost increases from amending the annual leave,” he added.