Wednesday, June 25, 2008

The Oman Law Digest 2009 - EMPLOYMENT

Omani labour law comprises Labour Law [RD 35/03] and various regulations issued as MD by the Ministry of Manpower (“MOM”) (together “Law”). Recent significant amendments [RD 74/06] include permission for formation of trade unions and regulations for strikes.

Both Omani and expatriate employments in the private sector are regulated by Law. The Law provides for employment of Omanis to the maximum possible extent. For employing a foreigner, the employer must obtain prior labour clearance from MOM which is subject to conditions: (i) qualified Omanis are not sufficiently available for the relevant post; and (ii) the employer has achieved the minimum Omanisation percentage specified for its sector.

Foreign employees must satisfy certain conditions: (i) must be professionally competent with requisite qualifications for the post; (ii) must comply with Foreigners Residence Law [RD 16/95]; (iii) must be medically fit; (iv) must have a contract with employer who has licence to do business; and (v) must have a work permit.

The prescribed fee (currently, RO 100) for labour clearance is used for funding vocational training programmes for Omani employees. Sector-wise, long-term Omanisation targets were introduced by a series of MDs in 2003. These are regarded as mandatory, and exceeding the target percentage entitles employers to preferential treatment in expediting the process of getting labour permits for other foreign employees and in other dealings with Government authorities.

Minimum benefits in the Law must be accorded to employees. Employer may provide more benefits but, in case of conflict in interpretation of benefit, the superior benefit prevails.

An employment contract is required to be in writing and must include the names of employer and employee, employee’s date of birth, qualification, place of residence and nationality, job description, salary and notice period. In addition, the employee must undertake in the contract: (i) to abide by the terms and conditions of contract; (ii) to respect Islam, laws of country, customs and traditions; and (iii) to refrain from interfering in any activities prejudicial to security of country.

If the contract does not provide for a duration, it is deemed to be for an indefinite term. For non-Omani employees, term of work permit (i.e., two years) would be deemed to be the contract term. Law permits, but does not require, a probationary period which may not exceed three months. Either party may terminate the contract during the probation period by serving seven day notice to the other party prior to the intended date of termination. Where a contract is for an indefinite term, any party may terminate by serving a 30-day notice (if wages are paid on a monthly basis) to the other party specifying reasons. Notice may be waived if compensation equivalent to employee’s wage for notice period is paid by the party waiving the notice.

Upon termination, the employer must pay an end-of-service benefit calculated on the basis of half month’s last earned basic salary for each year of the first three years of service and one month’s basic salary for each of the following years.

Employees must not work for more than nine hours per day and 48 hours per week. Actual working hours will be decreased during Ramadan for Muslim employees to six hours per day or 36 hours per week. Employees are entitled to annual vacation of 15 days upon completion of first year of service and 30 days for each year thereafter.

The Law also regulates employment of women and juveniles, employment in mines and quarries, industrial safety, medical facilities, resolution of labour disputes, representative committees, transfer of employees, and penalties for violation of Law.

Human Trafficking Law [RD 126/08] seeks to control human trafficking offences including intentional exploitation, illegal transportation, shelter or recruitment by coercion, deception or undue influence which carry a sentence of up to 15 years’ imprisonment and/or a fine of up to RO 100,000. A national committee to tackle human trafficking will be constituted. An independent Human Rights Commission was established pursuant to RD 124/08.