Before turning to those routes, it’s helpful to understand the two types of contracts recognised by law. A definite (fixed-term) contract runs on an agreed period of time and simply comes to an end when either the period has expired or the agreed work is complete, the employer does not need to state a reason; the contract can be allowed to lapse by not renewing it. An indefinite contract, by contrast, has no set end date, so it can only be brought to an end by invoking one of the grounds the law provides.The employer can’t simply end it without falling under one of these grounds.

Dismissal without notice or gratuity

Article 40 gives employers a limited and serious set of grounds for dismissing a worker immediately, without notice or gratuity. This includes earning a job via a false identity or forged documents, causing serious material loss through a mistake (provided the ministry is informed within 30 working days), disregarding written safety instructions after a prior written warning, unauthorised absence exceeding seven consecutive or ten intermittent days in a year, disclosing the employer’s confidential information, a final conviction for a felony or a crime against honour or trust, being intoxicated or under the influence of narcotics during working hours, assaulting the employer, a superior, or a colleague at the worksite, and any serious breach of the worker’s contractual obligations.

Immediate termination initiated by worker without losing entitlements  

According to article 41, the worker can end the employment relationship without abiding by the usual notice period, or prior to the expiration of the fixed-term contract, while maintaining rights and end-of-service gratuity, if the employer induced the contract through fraud, failed to pay wages for more than two consecutive months or otherwise failed to meet its fundamental obligations, committed an act contrary to public morals towards the worker, assaulted the worker, or exposed the worker to a serious safety or health danger that the employer knew about and failed to address.

Employer termination with notice

Article 43 permits the employer to end an indefinite contract unilaterally, after notice, in certain situations like the worker reaching the age of retirement under the Social Protection Law; ending a non-Omani worker’s service to replace them with an Omani in the same role; failure to reach required competency after a written warning and a grace period of at least six months, in which case an Omani worker’s replacement must also be Omani; and closure or partial closure, bankruptcy, reduced activity, or a change in production methods that affects workforce size. For grounds of competency and restructuring, the employer should inform the ministry of the reason three months prior to the date of termination, and should avoid terminating an Omani worker whose competency and experience match those of a non-Omani colleague retained in the same establishment.  

Articles 44 to 46 set out a formal procedure where a genuine economic cause exists with a financial loss sustained for at least two consecutive years, not merely a failure to profit.  The employer applies to a dedicated committee chaired by the ministry, with the Ministry of Commerce, Industry, and Investment Promotion, the Oman Chamber of Commerce and Industry, and the General Federation for Workers of the Sultanate of Oman as members. The committee can approve the reduction, reject it, or impose alternatives such as shorter hours, unpaid leave, or reduced wages across the workforce. If a reduction is approved, the employer must select workers by a fair standard such as performance, give at least three months’ notice, and give those affected priority in re-employment if a suitable vacancy later arises.

Conclusion

This blog post highlighted some cases by which an employment contract can be terminated by the employer or the employee. The law also provides for other cases through which an employment relationship can come to an end, such as the death of the worker or his incapacity to work.

It is highly recommended for everyone to make themselves familiar with the Labour Law. You can read it in English on the link below:

Written by:

Malak Al Kharusi

Malak is a legal intern at Decree. She has previously interned in the government sector. She is interested in commercial law. She is about to start the final year of her Business Management and Law degree at Leeds Beckett University.

Labour Union

Article 1 defines a labour union as the association of employees within a single company with the purpose of protecting and representing the shared interests of workers. Establishing a union is an optional matter rather than mandatory. Workers are not obligated to establish a union but they can if they choose to. The same article mentions that this can only be established if the organization has more than 50 employees. To register, an application must be submitted to the Ministry of Labour including the proposed name of the union, scope of activity, the address, minutes of the founding meeting, certified list of a minimum of 25 founding members, and a draft set of articles of association. The powers of the union entail litigating on behalf of members, participating in drafting the labour regulations of the establishment, and confidentially reviewing data regarding discipline, wages, and promotion, alongside negotiating collective agreements. Under article 31, to join the union the worker must be employed at the establishment, be at least 18 years old, not be currently a member of any other union, not be registered as an employer, and must pay fees prescribed for the union.

Trade Union

Article 1 says that a trade union is an organization formed by not less than five labour unions functioning in the same sector registered with the ministry. Just like labour unions establishing a trade union is optional not mandatory, and only one union is permitted per sector. To register, the founding labour unions must submit an application to the Ministry of Labour consisting of the proposed name of the union, scope of activity, the address, minutes of the founding meeting, a certified list of a minimum of five founding labour unions, and a draft set of articles of association. The powers of the trade union center on sector-wide collective bargaining, participating in labour-dispute panels, and coordination between the General Federation and member unions.

General Federation of Workers

The General Federation for Workers of the Sultanate of Oman is defined as the body consisting of all labour unions and trade unions that have joined it and registered with the ministry. It is the sole national tier that is positioned above the two. What differentiates the General Federation of Workers from the rest besides its scale, is its oversight. Article 4 states that no labour or trade union may associate with a global body without the prior approval of the federation. The federation sets the standard on membership dues throughout all unions and may freeze the work of a union or dissolve its membership for severe violations. It also represents Omani workers in multilateral interchange between the government and employers, and in global settings.

Conclusion

Understanding which tier you’re dealing with—labour union, trade union, or the General Federation of Workers—isn’t a technicality. It determines who has standing to negotiate, what’s actually on the table, and what a worker can expect in terms of dues, leave, and protection. To learn more about labour unions, trade unions, and the General Federation of Workers, we highly recommend that you read the Ministry of Labour Decision 284/2026 Regarding the Statute for the Formation, Work, and Registration of Labour Unions, Trade Unions, and the General Federation for Workers of the Sultanate of Oman:

Written by:

Malak Al Kharusi

Malak is a legal intern at Decree. She has previously interned in the government sector. She is interested in commercial law. She is about to start the final year of her Business Management and Law degree at Leeds Beckett University.

The Sultan, being the head of the state, oversees the three branches of the government instead of being within them. Article 48 addresses him as the supreme representative of the state and supreme commander of the armed forces, with his person inviolable and his command obeyed. Article 49 goes on to list all the functions of the head of the state, which include declaring a state of emergency; promulgating laws (which gives him ultimate authority over legislation); appointing and dismissing the prime minister, deputy prime ministers, ministers, undersecretaries, senior judges, and senior military officers (which gives him the final word over the judiciary and the armed forces); and ratifying treaties. The Sultan’s authority effectively spans the legislative, executive, and judicial branches together with the military, regardless of who manages day-to-day administration underneath him.

The role of the Prime Minister is distinct from the role of the Sultan, whose primary responsibility is administering the executive branch and running the Council of Ministers, which is tasked with implementing public policy, overseeing the administrative apparatus, coordinating between ministries, and proposing draft laws and decrees for the Sultan’s approval.

In addition to these general functions, article 55 states that if the Sultan appoints a prime minister, the mandates and powers of the prime minister will be specified in the royal decree appointing him. Therefore, the role of the prime minister is distinct from the role of the Sultan, and the Basic Statute of the State explicitly specifies that the Sultan can appoint someone else in this position.

Nothing in the Basic Statute obliges the Sultan to ever exercise the option to appoint a prime minister, and nothing prevents him from doing so at any time; article 55 simply sits in reserve, a standing mechanism rather than an active office, ready to be activated by a single decree whenever it is judged useful.

Even though the Sultan today is acting in both capacities, just as Sultan Qaboos did for most of his reign, it is worth noting that Oman did have a prime minister other than the Sultan in the early seventies, who happened to be Sayyid Tarik bin Taimur, Sultan Haitham’s own father.

You can learn more about the functions of the Sultan and the Prime Minister by reading the full text of the Basic Statute of the State at the link below:

Written by:

Malak Al Kharusi

Malak is a legal intern at Decree. She has previously interned in the government sector. She is interested in commercial law. She is about to start the final year of her Business Management and Law degree at Leeds Beckett University.