Thursday, January 26, 2012

New Amendments to Oman’s Labour Law

The recently promulgated Royal Decree 113/2011 has made key amendments to some provisions of Oman’s Labour Law (the “Labour Law”). In general, the aim of these amendments is to improve working conditions in the Sultanate and to enhance the legal protections afforded to workers.

Weekends and annual leaves

The most significant of the recent amendments concerns providing workers with legally mandated time off. The Labour Law now guarantees workers two days off per week (compared to the previous one day minimum). Workers are also now entitled to annual leave of thirty days fully paid, which may be applied for after completing six months of service. Emergency leave was also increased from four to six days per year.

Special leave and working hours for female employees

Pursuant to the recent amendments, the Labour Law now entitles working women to a maternity leave of 50 days fully paid, to cover the pre- and post-maternity period. In addition, working hours for women have been amended to prohibit employers from requiring female employees to work between 9 p.m. and 6 a.m. (other than in places and on occasions authorized by the Minister of Manpower).

New overtime rules

The recent amendments to the Labour Law set the maximum working hours to be nine hours per day and forty-five hours per week. During Ramadhan, Muslim workers must not work for more than six hours per day and thirty hours per week.

However, workers may be asked to work overtime, if their work so requires, provided that the worker’s total working hours do not exceed 12 hours per day. Any worker who performs overtime work is entitled to either overtime payment equal to his basic salary per hour plus (i) 25% for extra hours during the day, and (ii) 50% for extra hours are during the night, or time off equal to the amount of overtime worked. In either case, the worker must agree in writing to perform overtime work and to the type of compensation he will receive therefor.

Compensation for unfair dismissal

Significantly, the recent amendments to the Labour Law removed the cap on unfair dismissal compensation that had previously been in force. Prior to the amendment, the maximum compensation that a worker could receive for unfair dismissal was 12 months’ salary. The Labour Law now gives the Omani courts the power to award the worker any amount not less than three months’ salary calculated on the basis of the worker’s last full salary, without a cap. The award should take into account the employee’s unique circumstances and the length of his service, and will be in addition to the end of service gratuity and any other entitlements provided for by Labour Law or in the contract of employment, whatever is greater.

Retention of Omani project workers

Another significant aspect of the recent amendments to the Labour Law relates to Omani workers on projects that change ownership. When a project, or part of one, is transferred to a new owner, the new owner will be required to retain all of the project’s Omani workers and to maintain their prior benefits and incentives for as long as such project remains ongoing.