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Oman

January 15, 2021

By Gordon Barr, Ghazal Hawamdeh and Samir Kantaria

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Oman

KEY DEVELOPMENTS FOR 2021


 

Increased Omanisation efforts

Omanisation levels are rising in most business sectors with the previous 30—35% requirement (of Oman national employees) rising to 65% in most instances. Alongside the increased Omanisation requirement, the temporary six‑month visa ban, put in place in 2018 for 89 specific job roles and extended every six months to date, has been enhanced by Ministry of Manpower Ministerial Decision (MD) 47 of 2020 adding "sales representatives" and "sales promoters" to the list of roles banned for further visas. It is worth noting that in respect of the new roles added under MD 47 of 2020, the ban is applicable to renewals, as well as new visa applications, effectively Omanising the roles in question. MD 47 of 2020 follows MD 221/2019 which effectively Omanised nine other roles including many management positions and all administrative and clerical positions.


 

Job security fund

According to Royal Decree No. 82 of 2020, issued 17 August 2020, His Majesty Sultan Haitham bin Tariq Al Said, Sultan of Oman, ordered to create the job security fund, and in order to enhance the principle of community solidarity, all Omani employees working in the Sultanate for the Government and private sectors will participate in the fund at a rate of 1% of the monthly gross salary of each employee for the benefit of the fund. Whereas, governmental or private sector employers contribute 1%. This new arrangement was applied starting January 2021.


 

Labour disputes

Royal Decree No. 125 of 2020 (Simplification of Litigation Procedures regarding Some Disputes): stipulates that the Primary Court must issue a decision within (30 days) and may be extended if required for an additional (30 days) (previously, there was no timeline for the judge to issue a decision and it could take up to a year). The deadline to appeal Primary Court judgments is now 15 days (previously it was 30 days). The Court of Appeal will then issue its appeal judgement within 30 days and may be extended if required for an additional 30 days (before there was no timeline for the judge to issue a decision, it could take up to a year). If the appeal judgement confirmed the dismissal of the employee, then the appeal judgment may not be further appealed to the Supreme Court (the case before was that parties may appeal judgments all the way up to the Supreme Court).

With thanks to Gordon Barr, Ghazal Hawamdeh and Samir Kantaria of Al Tamimi & Company for their invaluable collaboration on this update.

 

KEY DEVELOPMENTS FOR 2020


 

Abolition of the No Objection Certificate Requirement

Royal Decree No. 125 of 2020 (Simplification of Litigation Procedures regarding Some Disputes): stipulates that the Primary Court must issue a decision within (30 days) and may be extended if required for an additional (30 days) (previously, there was no timeline for the judge to issue a decision and it could take up to a year). The deadline to appeal Primary Court judgments is now 15 days (previously it was 30 days). The Court of Appeal will then issue its appeal judgement within 30 days and may be extended if required for an additional 30 days (before there was no timeline for the judge to issue a decision, it could take up to a year). If the appeal judgement confirmed the dismissal of the employee, then the appeal judgment may not be further appealed to the Supreme Court (the case before was that parties may appeal judgments all the way up to the Supreme Court).


 

Termination of employment as a result of the impact of Coronavirus

The recent decisions of the Supreme Committee dealing with Oman's response to the pandemic established that employers may dismiss expatriates who could be repatriated upon payment of all contractual dues up to the end of their notice periods (including an end of service gratuity). Formerly, terminations on any ground other than an Article 40 of the Labour Law ground (akin to gross negligence or misconduct) typically gave rise to an additional compensatory payment of between 3 – 6 months' gross salary (uncapped).

 

KEY DEVELOPMENTS FOR 2019


 

Extension of recruitment ban

The Ministerial Decree, No. 38 of 2018, issued by the Ministry of Manpower (“MOM”) imposing a temporary ban on the recruitment of expatriates in a number of professions in the private sector was extended at the end of July 2018 and further extended in November 2018 (effective start of February 2019), each time for an additional 6 month period. The original decree applies to 87 roles across numerous business sectors and includes, but is not limited to, Information Technology Specialists, Insurance Agents, Engineers, Advertising Agents, Technicians, HR Specialists. The latest extension has added workers in the construction, cleaning and workshop sectors and purchase and sales representatives.

This ban does not affect expatriates who are already employed in the aforementioned list and generally does not apply to expatriates whose labour permits and/or residency visas are expired and need to be renewed.

The ministerial decree does not apply to companies that are both registered with the General Authority for the Development of Small and Medium Enterprises and insured by the General Authority for Social Insurance (PASI).

 

KEY DEVELOPMENTS FOR 2018


 

Wage Protection System Updated

From November 2017, companies in Oman have been required to adopt the Ministry of Manpower’s new wage protection system which aims to ensure that employees are paid as per their employment contracts and on a timely basis.

The Ministry of Manpower confirmed that in cooperation with the Central Bank of Oman it has upgraded the wage protection system to ensure stability of work at private sector establishments and enhance the development of systems and services offered to employers and employees.

All organisations in Oman are subject to the new regime and had 3 months to ensure that their work systems follow the new payment regulations and conform to the new system.


 

Omanisation Measures

The suppressed economic environment has seen the authorities in Oman tighten access to some jobs for non-Omani workers. Ministerial Decision No. 289 of 2017 prohibited new expat staff being taken on at professional skills development centres. Expat staff already employed at such centres will not have their permits renewed when they expire. Meanwhile Ministerial Decision 187 of 2017 and 192 of 2017 saw a suspension on using part time expat workers on construction sites between June and November 2017. Ministers have issued general warnings to all private companies that a failure to meet Omanisation quotas will result in the loss of government benefits.


 

Expectations for 2018

In 2017 a new Labour Law was anticipated but did not materialize. It is not certain if one will be introduced in 2018. It also remains to be seen whether the government will end the requirement for a No Objection Certificate (“NOC”).

 

KEY DEVELOPMENTS FOR 2017


 

Draft amendment to Labour Law

A draft Labour Law has been in circulation for a few years but has not been published. This law (if enacted) would bring about changes to the Omani Labour Law and would also have a chapter specific to Oil and Gas companies with special provisions for employees working in this field.

It is still not clear whether this will be published in 2017 or not.

 

KEY DEVELOPMENTS FOR 2016


 

Key developments from 2016

There were no key employment or labour law developments in 2016.

With thanks to Gordon Barr, Ghazal Hawamdeh, Laya Al Hareeri and Roxanne Vesuvala of Al Tamimi & Company for their invaluable collaboration on this update.

Contributors

Image: Suzanne Horne
Suzanne Horne
Partner, Employment Law Department

Image: Kirsty Devine
Kirsty Devine
Associate, Employment Law Department

Image: Aashna Parekh
Aashna Parekh
Associate, Employment Law Department

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