The policy of hiring Omani employees whenever possible – which is called Omanisation – is the bedrock of Oman’s Labour Law (RD 35/2003 as amended).
It is also a legal requirement: Every employer in Oman, whether large or small, foreign-owned or Omani-owned, must have a certain percentage of Omani employees which varies depending on the economic activity in which that employer is engaged.
From time to time, the Ministry of Manpower sets these percentages for each economic activity; in many sectors of the economy, the percentages are required to increase year after year.
An employer who fails to achieve his Omanisation percentage in a given year will generally be barred from obtaining visas for expatriate workers until the target number of Omani workers is achieved. The objective of this policy is to create a fully-sustainable and self-sufficient Omani workforce as soon as possible.
It is worth mentioning that the Omani Labour Law makes it clear that the employer shall employ Omani workers to the maximum possible extent.
Local practice seems to interpret this to mean that terminating the contract of an expatriate worker may be proper if the reason is to fill his position with an Omani individual who possesses the same qualifications.
In short, the decision to Omanise a particular position must be genuine, and not a pretext or a cloak for simply terminating the services of an otherwise qualified expatriate worker.
The Omani Labour Law, as written, is extremely protective of the rights of all employees, whether they are Omani or expatriate. Every worker in Oman (with the exception of domestic servants, employees of the State, and dependent members of an employer’s family) is entitled to certain basic rights, among them:
A workday of not more than nine hours.
A working week of not more than 48 hours
Overtime for any hours worked beyond these limits for an additional 25 per cent of the employee’s salary
At least one paid rest day per week
At least 15 days’ annual leave with basic salary after the first full year of employment
At least 30 days’ annual leave with basic salary after the second full year of employment
A requirement that the employee take at least two weeks’ leave every two years
Up to ten weeks’ sick leave per year, with full salary paid for the first two weeks and decreasing to one-quarter of full salary for the last three weeks
Bereavement leave of two to three days depending on the proximity of the relationship
Full salary paid for all public holidays as declared by the Ministry of Manpower
At least 30 days’ notice of termination
The ability of an employee to lodge a claim for reinstatement against the employer in case of termination or to seek damages for unfair dismissal.
Furthermore, the local practice of both the Ministry of Manpower and the courts is to resolve every doubt in favour of the employee.
For example, though the letter of Article 37 states that the employer may terminate an indefinite term contract upon giving the employee at least 30 days’ prior notice (unless the contract specifies a longer period), the reality of practice is that an employer must have a valid legal cause to terminate an employee and must have communicated this cause to the employee in the letter of termination.
This principle, like the others, holds true whether the employee is Omani or expatriate. In general, a valid legal cause must involve some sort of documented misconduct by the employee or some act or omission that caused significant financial loss to the employer.
If an employee is terminated for no valid legal cause, he may be entitled to compensation that ranges from a minimum of three months’ to a maximum of twelve months’ full salary.
The general perception that one cannot terminate an employee in Oman is due to the practice in the Ministry of Manpower and the courts of requiring that any performance deficiency be documented and discussed with the employee to allow him a chance to remedy the problem before a decision to terminate is taken.
This means, at the level of the workplace, that there must be procedures in place to document employee misconduct and to allow the employee to respond to any charges against him.
As a matter of transparency, and to create a better understanding among employees, it is advisable for every company to draft and make available to its staff a set of internal procedures and guidelines, which should of course be checked for accuracy by an expert in labor law and practice.
In addition, companies can derive great benefit by searching for or putting in place opportunities to train their human resources personnel and mid-and senior- level managers on the prevailing labour practice in the sultanate.
The author is proprietor, Said Al Shahry Law Office