The new Oman Labor Law, promulgated by Royal Decree 53/2023 (the New Law) on July 25, 2023, has brought about significant changes in the Oman labor landscape. These changes aim to achieve the goals of the Oman Vision 2040. The New Law replaces Royal Decree 35/2003 (the Old Law).
In this article, we will examine some of the key changes introduced by the new labor law:
| Key Changes | |
| Changes in Fixed-Term Contracts: | » The automatic conversion of temporary contracts to permanent ones after renewal will no longer occur. » However, if the employment continues for more than five years, the contract will automatically be considered permanent. |
| Working Hours: | Reduction of daily working hours from 8.5 hours to 8 hours (40 hours per week). |
| Dismissal of Employees: | » Employers can dismiss employees for poor performance (subject to specific conditions). » Compensation for unfair dismissal has been capped at 12 months’ salary. » The new law prohibits discrimination in dismissals. |
| Redundancy Layoffs: | » Employers can lay off employees for economic reasons and with the approval of a committee composed of members from different ministries. |
| Omanization: | » Employers must share their workforce Omanization strategies with the Ministry of Labor. » The new law allows the dismissal of non-Omani employees to be replaced by an Omani citizen. |
Changes to Leave Regulations under the New Oman Labor Law
The new law amends the existing structure and regulations pertaining to various categories of leaves, introducing new conditions for leave in some cases and expanding others.
Summary of the new leave regulations:
| Key changes to the revamped leave regulations: | |
| Sick Leave: | » Increase in paid sick leave from 10 weeks to 182 calendar days (with specific conditions): 100% salary for the first 21 days 75% salary from days 22 to 35 50% salary from days 36 to 70 35% salary from day 71 to 182 |
| Patient Accompaniment Leave: | » 15 calendar days per year for Omani employees to accompany a patient (spouse or up to the second degree) |
| Special Leave: | » Employees may request unpaid leave with the employer’s consent. » During the leave, the employee shall bear the social security insurance premium. |
| Special Leave Without Pay: | » Replaces emergency leave » No specific time limit » Payment of all legal contributions to the social security fund by the employee |
| Spouse’s Maternity Leave: | » 7 calendar days for male employees |
| Maternity Leave and Unpaid Child Care Leave: | » Increase in maternity leave from 58 to 98 days » Addition of “unpaid child care leave” up to 1 year |
The new Oman Labor Law came into effect in July 2023, introducing changes to regulations related to employment contracts, wages and salaries, occupational safety and health, and dispute resolution mechanisms.
Changes to Employment Contracts
Some of the changes related to employment contracts include:
- Minimum Employment Age: The minimum employment age is 18 years for Omani workers and 21 years for non-Omani workers.
- Probationary Period: The maximum probationary period is 3 months for Omani workers and 6 months for non-Omani workers.
- Types of Employment Contracts: The new Oman Labor Law recognizes four types of employment contracts: temporary contracts, permanent contracts, seasonal contracts, and part-time contracts.
- Duration of Temporary Contracts: The maximum duration of a temporary employment contract is 2 years. If the employment continues for more than five years, the contract will automatically be considered permanent.
- Termination of Contract: Employees can terminate their contract by providing 30 days’ written notice to the employer. Employers can also terminate the employment contract under specific conditions and in accordance with legal procedures.
- Termination Indemnity: In case of illegal termination of the contract by the employer, the employee is entitled to receive termination indemnity. The amount of termination indemnity depends on the length of service and the employee’s salary.
Changes to Wages and Salaries
The new Oman Labor Law has introduced changes in the area of wages and salaries, as follows:
- Minimum Wage: The minimum wage for Omani workers in the private sector is set at OMR 350 per month, and for non-Omani workers at OMR 250 per month.
- Overtime Pay: Workers are entitled to 1.5 times their basic salary for overtime work, which includes work on holidays and irregular working hours.
- Holiday Pay: Workers are entitled to full pay for official holidays, including religious, national, and Eid holidays.
New Occupational Safety and Health (HSE) Regulations
The new Oman Labor Law introduces several obligations for employers in the area of occupational safety and health (HSE). These employer obligations towards workers include:
- Safe and Healthy Work Environment: Employers are required to provide a safe and healthy work environment for their workers. This includes: Adequate ventilation, Proper lighting, Control of physical and chemical hazards.
- Personal Protective Equipment (PPE): Employers are required to provide appropriate PPE to their workers. This includes: Helmets, Safety glasses, Masks and Work clothes.
- Worker Training: Employers are required to train their workers on occupational health and safety hazards. Training must cover topics such as: Hazard identification, Risk assessment and Emergency response procedures.
- Worker Complaints: Workers have the right to complain if they observe any health or safety hazards.
Overall, employers with 50 or more employees are required to form an HSE committee and are obligated to prepare and implement a comprehensive HSE program. The Oman Ministry of Labor will conduct periodic inspections of workplaces to ensure proper implementation of HSE regulations.
Dispute Resolution in the New Oman Labor Law
The new Oman Labor Law introduces various mechanisms for resolving disputes between employees and employers.
The first step in dispute resolution is direct negotiation between the employee and the employer. If no agreement is reached in the negotiations, either party can approach the Ministry of Labor to resolve the dispute.
The Ministry of Labor, through a specialized unit called the “Labor Dispute Resolution Department”, will investigate and resolve the dispute.
If a dispute cannot be resolved through negotiation, Ministry of Labor or arbitration, either party may refer the matter to the competent judicial authorities.
Resources: Royal Decree No. 53/2023 _ Oman Ministry of Labour _ pwc.com