Oman’s New Labour Law Regulates Market, Introduces Best Practices

The new Labour Law Royal Decree issued by His Majesty Sultan Haitham Bin Tarik is formulated in line with the fundamentals of Oman Vision 2040 and specifically addresses issues related to the labour market.

The Labour Law seeks to furnish an environment that positively responds to changes through legislation that is flexible, resilient, efficient, and adept at addressing current and future challenges.

The law places national capabilities at the forefront of its priorities, preparing them to take centerstage within a framework that ensures rights and duties, thereby enhancing the institutional performance of the private sector and effectively shaping administrative practices.

The Labour Law reaffirms that employment is an intrinsic right for Omanis, stipulating that no others are allowed to work within the Sultanate of Oman except in accordance with conditions and statuses defined by the law and decisions enacted thereof.

The law underlines the importance of each establishment disclosing its annual plan for localisation and replacement, to be published at the workplace and on its official website. This should include a detailed report on the number of Omani workers, their salaries, their gender, and any information about job vacancies, if available.

The law dictates that every establishment must devise a plan incorporating the appointment and training of Omanis for leadership roles and ensures its effective implementation. It also calls for the development of practical strategies to retain the Omani workforce.

The Labour Law is the outcome of a nationwide initiative, involving various stakeholders i.e. employers and workers, as well as specialised entities.

The law ratifies the formation of a Joint Dialogue Committee between these stakeholders. This committee is responsible for examining proposals that could regulate the labour market and help fortify relationships between the stakeholders related to the labour market. It will also analyse updates in both Arab and international labour standards to utilise them in enhancing collaborative dialogue. Additionally, the committee will work to coordinate the efforts of social partners in the labour market to amplify productivity, augment competitiveness, and ensure balance and harmony between the interests of workers and employers. This all aims to reinforce national endeavours towards achieving inclusive and sustainable development.

The Law, structured into ten sections, provides comprehensive oversight on employment regulations, contracts, and obligations between employers and workers. It stipulates specifics pertaining to working hours, leave allowances, remuneration, the employment of young individuals, occupational health and safety, along with a spectrum of labour unions. Furthermore, it addresses the General Trade Union, the settlement of labour-related disputes, and related punitive measures.

The Labour Law grants numerous benefits to working women. These privileges include an allocated hour each day for child care and a 98-day maternity leave provision. Further, it allows to avail themselves of an unpaid leave period lasting up to a year for child care. The law also obliges employers to provide a dedicated rest place in establishments where the number of female workers exceeds 25.

The new law introduces a variety of privileges for the employer, most notably: The law allows work in specific sectors to be organised according to the conditions unique to each sector, fostering stability in establishments and enabling the employer to manage their business in accordance with the sector’s specific circumstances.

With the Ministry of Labour’s approval, the law permits the employer to allow a worker to work temporarily for another employer. This provision eases business operations and mitigates the cost of recruiting foreign labour for the employer.

The law empowers the employer to terminate the contract if a worker fails to achieve the stipulated level of productivity. This is permitted after notifying the worker about the areas of inefficiency and providing them with an adequate period of no less than six months to rectify it. This clause, when implemented, can boost productivity within the establishment and promote competition among workers.

The law also allows for the termination of non-Omani employees, facilitating the process of ‘Omanisation’, if an Omani worker is employed to replace them in the same position.

To ensure uninterrupted operation in the establishments and to prevent work stoppages due to strikes, the law mandates that the workers, or their representatives, should inform the designated settlement committee to initiate dispute resolution promptly.

The Labour Law has implemented fresh leave provisions, bearing in mind the social aspects of the worker with the objective of enhancing their productivity and overall performance. These encompass a seven-day paternity leave and a 15-day caregiver leave for accompanying a patient. Additionally, the number of sick leave days has been increased, and the duration of maternity leave has been extended.

The law underwent multiple stages of preparation before it was finally enacted. Initially, the draft law was showcased to the three parties related to the labour market. Following this, a workshop concerning the draft law was conducted, attended by representatives from these production parties, various government bodies, and professional associations, with a total of 125 participants. One outcome of the workshop was the subsequent update to the draft law, which was again presented to the concerned parties. The revised draft was then submitted to the relevant governmental authorities. Subsequently, the proposed law was forwarded to the Council Oman Council, which consists of the State Council and Shura Council, and it underwent its legislative cycle of review. Eventually, it was enacted through a Royal Decree.