Law Updates

New Grounds for Terminating Employment Under Omani Labour Law

The long-awaited new Omani Labour Law is finally out. The new law makes many substantive changes to the way employment is regulated: From the scope of its application and employee rights, to collective bargaining and employment dispute resolution. The law was issued only a few hours ago, and it will take everyone a bit of time to fully digest the extent of the changes introduced by this law.

However, one of the most interesting new provisions in this law will certainly be article 43 which allows employers to terminate the service of certain employees with notice in a new set of circumstances not available under the previous Labour Law, namely:

New grounds for terminating employees under article 43 of the new Omani Labour Law

– The failure of the employee to reach the required standard of performance after giving the employee a grace period of six months to reach this standard. If the employee is Omani, it is required to appoint another Omani employee as a replacement.

– The partial or total shutdown of the establishment, its bankruptcy, the reduction of the scope of its activity, or the replacement of the production system with an alternative that affects the number of required staff.

– The existence of an economic reason for the establishment to terminate the employee, and in this case an application must be submitted to a committee in the Ministry of Labour to approve the staff reduction to a degree that allows the business to continue operating and to avoid the risk of bankruptcy.

These grounds did not exist under the old law and are probably introduced to address extreme situations where companies were not allowed to dismiss their Omani staff even if the company no longer had a need for them or could not afford to continue to employ them.

The new law has many other extremely important provisions that will affect both small and large employers.

We have started working on Decree’s translation of the new Omani Labour Law, and we expect to have it available to our subscribers early next week. Once translated, it will be available in full in English on the link below: