New Rules for Transferring from Government Projects to the Private Sector. In a landmark decision, the Kuwaiti government has introduced new rules that will significantly impact the labor market, particularly concerning the transfer of workers from government projects to the private sector.

The changes, announced by the First Deputy Prime Minister, Minister of Defense, and Minister of Interior, Sheikh Fahad Yousef Al-Sabah, represent a significant shift in how expatriate labor mobility is handled in Kuwait.

Effective November 3, 2024, the new regulations come with a clear framework for transferring workers who were initially hired for government projects and contracts to the private sector. The decision also involves the elimination of a long-standing restriction that previously prevented these workers from moving to cooperative societies and unions, making the private sector a more accessible avenue for labor mobility.

The End of Clause No. 5 and the Changes It Brings

One of the most notable amendments under this new directive is the cancellation of Clause No. 5 of Article No. 3 from Public Authority for Manpower (PAM) Resolution No. 842 of 2015. This clause previously barred expatriate workers brought into the country for government projects from transferring to other sectors, particularly cooperative societies and unions.

The cancellation of this clause opens up broader opportunities for these workers, allowing them to explore employment opportunities in the private sector. However, this transfer is not without specific conditions, which must be strictly adhered to in order to ensure a smooth transition from the public to the private employment sector.

Read Also: 47,000 Kuwaitis Miss Biometric Deadline, 35,000 Bank Accounts Suspended

New Conditions for Worker Transfers

To regulate the process, the Kuwaiti government has set out five key conditions that workers and employers must meet for a successful transfer. These guidelines ensure that only eligible workers are transferred and that the movement of labor does not negatively affect ongoing or pending government projects. Below are the detailed conditions:

1. Project Termination: The government project or contract under which the worker was originally employed must have been completed or terminated. Without the conclusion of the project, no transfer will be allowed. This ensures that workers fulfill their contractual obligations before moving to new employment.
2. Official Confirmation: A letter must be issued by the government authority responsible for the project. This letter, addressed to the Public Authority for Manpower, must confirm that the project has officially ended and that the workers involved are no longer needed. This formal confirmation is crucial to validate the worker’s eligibility for transfer.
3. One-Year Employment Minimum: For a worker to be eligible for a transfer, they must have been employed for at least one year under the government contract. This condition prevents premature transfers and ensures that workers have committed a significant portion of their contract period to the project they were hired for.
4. Employer’s Approval: The current employer, with whom the worker is registered, must approve the transfer. This step ensures that the transition is mutually agreed upon by both the worker and the employer, preventing any potential labor disputes.
5. Transfer Fee: An additional fee of 350 Kuwaiti dinars must be paid to facilitate the transfer. This fee is a necessary step in the process and reflects the administrative costs associated with processing the worker’s transfer from a government contract to a private sector role.

Impact on Kuwait’s Labor Market

This new directive represents a significant shift in Kuwait’s labor regulations. By allowing workers employed on government projects to transfer to the private sector, the Kuwaiti government is creating more flexibility in its labor market. It is expected that this move will ease labor shortages in the private sector, particularly in industries that have been struggling to find skilled workers.

Moreover, the cancellation of restrictions on transfers to cooperative societies and unions is seen as a progressive step towards labor mobility. Previously, these restrictions limited the options available to expatriates working in Kuwait, especially those who completed their contracts on government projects. Now, these workers will have greater freedom to pursue employment in various sectors, which could potentially lead to a more dynamic and competitive labor market.

Financial Implications of the Transfer Fee

The introduction of the 350 Kuwaiti dinar fee is another aspect of this regulation that has caught attention. This fee is intended to cover the administrative costs associated with processing transfers and to ensure that the system remains efficient and sustainable. For workers, the fee may represent a significant cost, especially for lower-paid employees.

However, for many, the opportunity to move to the private sector and secure new employment may outweigh the financial burden of the fee.

Employers, too, will need to factor in this additional cost when considering the transfer of workers from government projects. The fee ensures that only serious transfer requests are processed and may also serve as a deterrent against unnecessary or premature transfers.

A New Era for Expatriate Workers in Kuwait

The new regulations are a clear indication of Kuwait’s intent to modernize its labor laws and create a more flexible labor market that can respond to the needs of various sectors. For expatriate workers, this is a major opportunity, as it provides them with more mobility and access to private sector jobs once their government project contracts conclude.

Employers in the private sector, meanwhile, may benefit from a wider pool of available workers, particularly those with experience in large-scale government projects. As Kuwait continues to evolve its labor policies, these new rules are likely to be the first of many reforms aimed at streamlining labor mobility and improving the overall employment ecosystem.

Conclusion

The new rules for transferring from government projects to the private sector are a progressive step for Kuwait’s labor market. The introduction of clear guidelines and a transfer fee ensures that the process is regulated and fair for both workers and employers.

This change not only benefits expatriate workers looking for new opportunities but also strengthens the private sector by providing it with a more diverse and experienced workforce.