On 25 July 2023, Oman announced a new labour law for workers in the private sector (Royal Decree No.53 of 2023), introducing new regulations on labour strikes, permission for migrant workers involved in labour disputes to remain in the country, and other significant changes. The new law follows a series of reforms made this year, including the implementation of the Wage Protection System, a new social security law and the rollout of a mandatory Health Insurance Scheme.
Local media and government officials have lauded the new labour law as a progressive step towards a productive and inclusive work environment. However, while the new law does introduce some significant improvements to working conditions, it retains provisions that are inconsistent with ILO conventions, and does not fully consider the rights of migrant workers, who constitute over 80% of private sector workers in Oman. Notably, Oman still stands as the Gulf country with the fewest number of ratified ILO conventions.
The New Labour Law
The new labour law provides a grace period of 6 months, starting from the date of its enforcement (31 July 2023), during which all parties affected by its provisions can rectify their status in accordance with the law.
The following summarises some of the new law’s key provisions in comparison to the previous law:
Shorter working hours: Maximum 40 “actual” working hours a week excluding a 1-hour break per day for food and rest. Previously, the Maximum working hours were set at 45 hours a week.
Increase in sick leaves: The total annual sick leave has risen to 182 days, a significant increase from the previous 10-week allowance (70 days) outlined in the earlier law.
Longer fixed-term contracts: A fixed-term contract no longer automatically becomes an indefinite contract upon renewal. However, if the employment continues for more than five years, then the contract term becomes indefinite. Termination of indefinite contracts by either party is more straightforward than termination of a definite contract, requiring only a “valid reason” and compliance with the notice period.
Terminating contract in case of non-payment: The new law allows workers to leave their employment if the employer fails to pay wages for two consecutive months or fails to abide by the main obligations of the labour law and the contract.
Clarity is lacking regarding the job transfer process, including the grace period migrant workers are provided to search for alternative employment after leaving their jobs due to wage theft or abuse.
Passport confiscation: For the first time, the new labour law explicitly prohibits the employer from keeping the worker's passport or private documents without the written consent of the worker.
Mandatory mediation: Under the new labour law, it is obligatory for labour disputes to initially undergo mediation at the Ministry of Labour. During this process, the Ministry aims to achieve a resolution within 30 days. In case a settlement isn't reached, the Ministry will refer the dispute to court within a week from the conclusion of mediation. Workers are prohibited from filing cases to directly to the court without mediation.
Increase in maternity leaves and paternity leaves: The new labour law in Oman has increased paid maternity leave for female workers from 50 to 98 days, the highest in the region. Additionally, the law now includes 7 days of paternity leave for the first time.
Female workers’ rights: The new labour law provides 1 hour per day of nursing break for a period of one year from the end of maternity leave, and explicitly states that termination of employment due to pregnancy, childbirth or breastfeeding is considered arbitrary. The previous law only mentioned that employers cannot dismiss female workers due to “illness” associated with pregnancy or delivery, provided that the total period did not exceed six months.
End-of-Service benefits: Migrants who do not benefit from the provisions of the Social Protection Law, are entitled to a gratuity of not less than a basic salary for each year of service. Previously, the gratuity was half a month’s wage for each year for the first three years and a month’s wage per year for every subsequent year.
Repatriation of migrants: The new labour law explicitly mandates a 60-day period during which the employer holds the responsibility to arrange the repatriation of migrant workers. Should the migrant worker not have departed within this timeframe, the Omani government authorities are then compelled to facilitate their deportation. Previously, the law noted no timeframe for repatriation.
Right to stay after labour complaints: Importantly, migrant workers who initiate legal proceedings to recover their dues from the employer now have to retain the right to stay in Oman until the claim is decided upon. All costs associated with staying in Oman in such cases are borne by the worker. The law is not clear if such workers are able to work for other employers while they await the legal decision.
Termination for poor performance and redundancy: The new labour law allows employers to terminate a worker for poor performance for the first time, provided that the worker has failed to improve their performance within six months of being notified by the employer about the areas that require improvement. Furthermore, employers are now explicitly permitted to terminate workers for economic reasons, subject to approval by a committee composed of members from the Ministry of Labor, the Ministry of Commerce, Industry & Investment Promotion, the Oman Chamber of Commerce, and the General Federation of Trade Unions of Oman.
New arbitrary dismissal codes: Article 12 of the new labour law provides new provisions on what constitutes arbitrary dismissal which includes, among other cases, dismissal in case the worker has joined a union, the worker has filed a complaint against the employer, or the worker’s absence due to their arrest and detention by the authorities under certain conditions.
Compensation for arbitrary dismissal: The compensation for unfair dismissal is now capped at 12 months’ gross salary. The previous law stipulated 3 months' salary for unfair termination without a cap. Additionally, the worker has now 30 days to file a complaint against unfair dismissal, up from the 15 days stipulated by the previous law.
Increased penalties for irregular migrant workers: The new labour law stipulates that migrants who work without a permit or for an employer other than their own, and employers who hire workers irregularly, will be subject to imprisonment for a period of no less than ten days and not more than a month, and a fine no less than OMR 1000 (US$ 2,600) and not exceeding OMR 2000 (US$ 5,200), or one of these two punishments. The migrant worker is then deported at the cost of the employer and banned from entering Oman again. Previously, the old labour law stipulated a penalty of not more than OMR 100 (US$ 260) and/or a maximum prison term of one month, without a minimum prison term.
Workers unions: The new labour law provides new codes for union work. For example, Article 110 stipulates that registered trade unions, sectoral general unions, and the General Confederation of Workers shall enjoy an independent legal personality and have the right to exercise their activities freely without interfering in their affairs or influencing them. Additionally, it is prohibited to dismiss or penalise members of trade unions due to their trade union activity in accordance with the regulations.
Labour Strikes: While labour strikes were previously permitted under an Omani decree, the new law dedicates a section to labour strikes. Workers can strike within their workplace to enhance working conditions after receiving approval from three-quarters of the trade union's general assembly members. Strikes are forbidden in establishments offering public services, including essential sectors like oil facilities, refineries, ports, airports, and public transportation. Additional sectors can be designated by the Minister.
To initiate a strike, workers or their representatives must inform both the employer and relevant authority in writing at least three weeks prior. The notice should outline the strike's purpose and worker demands. Striking must cease during collective labour dispute resolution procedures.
Strike days result in unpaid leave for workers, while establishment closures due to strikes guarantee paid working days.
The new labour law penalises the worker who “obstructs or disrupts work in the establishment during the strike period” with imprisonment for a period of no less than one month and not exceeding six months, and/or a fine no less than OMR 500 (US$ 1,300) and not exceeding OMR 3000 (US$ 7,790).
Stricter Omanisation measures: The new labour law introduces stricter Omanisation policies and penalties. The law explicitly states that employers are not permitted to hire non-Omanis in professions reserved for Omanis. In addition to the current Omanisation decrees, employers who hire 25 workers or more must among other things, prepare a plan for hiring and training Omanis to occupy leadership professions.
The new law also introduces stricter measures for hiring Non-Omanis which include migrants in certain professions, determined by the Ministry of Labour, to pass standard tests for their respective professions. It has also doubled the penalties for employers who fail to comply with Omanisation regulations. Any employer not adhering to Omanisation quotas or regulations for replacing non-Omani workers will be subject to a fine ranging from OMR 500 to OMR 1,000 for each worker.
Change in medical mandates: The new labour law required employers with more than 200 workers to provide first aid equipment and appoint a qualified nurse to provide medical first aid, or contract with a specialised institution to provide such services. The previous law required employers with 100 workers or more to provide such services.
New regulations on advertising workers: The new law forbids the advertisement and categorisation of workers based on factors like religion, race, or cost, while also preventing any promotional efforts that might "undermine human dignity".
Vagueness of the new law and some limitations
Domestic workers are excluded from the new labour law. Unlike the former labour law, the new law does not explicitly state the exclusion of domestic workers but stipulates that the law "does not apply to those whose work is regulated by special laws or regulations.” Domestic work is sparsely regulated by Ministerial Decree 189/2004 on labour rules and conditions for domestic employees, which provide some of the weakest protections for domestic workers in the region.
Article 16 of the labour law provides a new code, which stipulates that the Minister of Labour may regulate work in a specific sector or a certain category, whenever the public interest so requires. A decree by the Ministry of Labour could change important regulations concerning workers' rights.
Unlike labour laws of other Gulf states, the new labour law only safeguards against discrimination in regard to termination. There are no other protections against discrimination in the workplace. Oman is the only Gulf state that has not signed the ILO Convention C111 on workplace discrimination. There are also no explicit protections regarding workplace harassment, including sexual harassment.
The new law also lacks clarity regarding job transfers for migrants and the regulations for employers to file absconding reports for non-Omani workers. According to Article 29 of the labour law, the conditions pertaining to the aforementioned issues, as well as the corresponding obligations and penalties for workers, will be "determined by a decision of the Minister.”
Despite some improvements in the new labour law, enforcement in Oman remains weak, particularly where migrants are concerned. For instance, while Oman is the only Gulf nation that mandates a two-day weekly break for workers, many low-income migrant workers still find themselves toiling six days a week with just a single day off and are not always compensated with overtime payments.
Furthermore, the condition of migrant workers in Oman, much like the rest of the Gulf region, is marked by hyper-dependency and a subordinate relationship with their employers that extends well beyond the immediate scope of their work arrangement and the labour law. The Kafala system plays a pivotal role in generating specific vulnerabilities within the living and working conditions of migrant workers, resulting in an inherent power imbalance that favours employers. Considering that the majority of workers affected by the new labour law are migrant workers, it is important to reform the immigration system while taking careful consideration of the fact that the majority of workers affected by the new labour law are migrants.