Nothing but a Name: Collective Labour Disputes Arbitration Committee under the New Labour Law

A new provision in the Labour Law that very few people are talking about is the new mechanism under Part Eight (Settlement of Collective Labour Disputes, Strike, and Closure) for resolving collective labour disputes, and its confusing reference to arbitration and the Law of Arbitration in Civil and Commercial Disputes.

The new Labour Law introduces a variety of new provisions that provide new rights to both employees and employers. In regard to employees, these new rights include new collective bargaining provisions which include in article 121 the creation of a committee called the “Committee for Arbitration of Collective Labour Disputes.”

Under Part Eight of the Labour Law, a collective labour dispute is first referred to a different committee that includes in its membership a representative of the Ministry of Labour, a representative of employers, and a representative of the General Federation of Workers. The objective of this committee is to attempt to mediate between the parties and facilitate the settlement of the dispute. If the parties fail to sign a settlement agreement, the dispute is then referred to “arbitration procedures” by the Committee for Arbitration of Collective Labour Disputes. Article 126 states that the Law of Arbitration in Civil and Commercial Disputes applies along with the Civil and Commercial Procedures Law in regard to the procedures of this committee in areas not covered by the Labour Law.

At first instance, permitting arbitration to be used to resolve labour disputes might seem as a progressive move that is advantageous to employers. Arbitration can potentially allow the dispute be resolved quickly without the opportunity for appeal, can allow the proceedings to be conducted in English, and can allow the matter to be dealt with privately. Arbitration may also allow the parties to select their own arbitrators.

However, a closer inspection of the provisions of Part Eight of the law makes it clear that the Committee for Arbitration of Collective Labour Disputes has nothing to do with arbitration. This committee is essentially a government tribunal chaired by a court of appeal judge and has in its membership individuals appointed by the Ministry of Labour, OCCI, and the General Federation of Workers. The only involvement of the employer in the selection of the so-called “arbitrators” is that the employer must select a replacement member if the member appointed by OCCI is absent.

These committees also fail to reflect other basic aspects of an arbitration process. In regard to the choice of language, since the chairman of this arbitration committee is a court of appeal judge, it is safe to assume that the proceedings can only be conducted in Arabic. In regard to the finality of the award, article 124 stipulates that the decision of the committee is final, but that it is also possible to contest this decision before the Supreme Court. This is in contrast with article 52 of the actual Law of Arbitration in Civil and Commercial Disputes which states that it is not possible to contest the awards of arbitration under any legal mechanisms of contestation.

Given that you cannot select the arbitrators, the applicable law, the language, or the procedures, and that it is possible to contest the decision before the Supreme Court, it is not clear how article 126 of the Labour Law expects the provisions of the Law of Arbitration in Civil and Commercial Disputes to apply to the resolution of disputes by these committees as the process here does not reflect arbitration in any shape or form.

The fact the proceedings of these committees are not arbitration proceedings is not unexpected, and it is possible that this confusion with arbitration is merely a result of a bad choice in the designation of the name of the committee. In the past, the Supreme Court has refused to enforce arbitration clauses used in employment contracts, as the court considers the right of employees to have access to a local dispute mechanism within the ministry and access to Omani courts as a fundamental right of the employee that cannot be waived by contract. This philosophy is supported by the fact the old Labour Law explicitly exempted workers from the payment of all court fees, while the new Labour Law stipulates the this matter will be governed by a special decision by the Ministry of Labour.

Using a special government tribunal to resolve collective labour disputes is a reasonable policy decision for the government to adopt. However, it would have been less confusing for everyone involved if the process conducted by these tribunals is not referred to as arbitration.