The Laws Regarding Penalties, the Grievances System, and Labour Disputes in Oman

General Overview of the Grievance System in Oman

The Omani Labour Law (promulgated by Royal Decree 35 of 2003, as amended) (the “OLL”) is the primary law regulating the private sector employer-employee relationship and the rights and obligations of employees.  Additionally, Ministerial Decision 129 of 2005 contains the penalty code and conditions for implementing it on private sector employees (“2005 MD”).  The 2005 MD provides that an employer may add offences to the penalty code that are not included in the specimen penalty code, if the nature and type of the business of the organization require this.

The rights and obligations with respect to employer and employees have been set out in the OLL.  This article will discuss the rights of employers and employees respectively.

Employer’s Rights

The circumstances in which an employer may dismiss a worker

Although the OLL states that either the employer or the employee may terminate the employment relationship upon 30 days’ notice (or such longer notice period that the labour contract may state), this does not negate the ability of the employee to receive compensation.  In other words, the use by an employer of a notice provision to terminate an employee will normally be seen by the Omani Courts to be a “termination for convenience”, thereby requiring the employer to pay compensation to the employee.  The Omani courts only rule out the requirement to pay compensation when they believe that the termination was due to what they see as a “valid reason”.  It is not possible to list specifically and comprehensively all of the acts or circumstances that could constitute a “valid reason” for termination, as these are normally decided on a case-by-case basis by the Omani courts and subject to the relevant evidence on hand.

Under Article 40 of the OLL, an employer has the right to terminate its contract with an employee without prior notice, or paying any end-of-service benefit, where the employee has committed an act of gross misconduct, for example, where the employee:

a) assumes a false identity;
b) makes a mistake that results in a material financial loss to the employer;
c) is away from work for more than 10 consecutive days without reasonable cause;
d) discloses confidential information of the employer;
e) receives a final judgment against it for an offence or felony for breach of honour or trust; or
f) is in a state of drunkenness or under the influence of an intoxicating drug or mental stimulants whilst at work or during work hours.

What is the employer’s role and rights as far as the Grievance System is concerned? 

According to Article 106 of the OLL, the employer is required to display in a conspicuous place the procedure for complaints and grievances.  The procedure will provide the employee the right to submit his complaint or grievance to the employer or his representative.  Further, it is important to note that the Company is obliged under the OLL to obtain an approval on the procedures for complaints and grievances from the MOM prior to displaying it at the workplace.  Moreover, Article 106 of the OLL further provides that the employee has a time limit of fifteen days from the date on which he was dismissed by the Company, to apply to the MOM, for annulment of the dismissal decision.

Employees’ Rights

The circumstances in which an employee may abandon the work prior to the termination of the contract 

Under Article 41 of the OLL, an employee has the right to abandon work prior to the termination of his contract (after giving written notice to the employer) where there has been gross misconduct on the part of the employer, for example:

a) where the employer has defrauded the employee;
b) the employer commits an immoral act toward the employee;
c) the employer assaults the employee; or
d) the employer is aware of a danger that threatens the health or safety of the employees and does nothing to rectify the danger.

For matters other than Article 41 of the OLL, the employee will need to comply with Article 107 of OLL if they have any complaint at the workplace.

What are the employees’ rights regarding the Grievance System? 

Article 107 of OLL provides that if an employee has a complaint he shall first follow the procedures laid down by the employer and if such procedure does not exist or does not address the employee’s grievance, the employee is authorized to apply to MOM in order to endeavour to reach a settlement for the dispute.  The first step to settling a labour dispute is obviously to try to resolve the issue internally between the parties.  If the parties failed to resolve their differences or if the procedure does not exist, the parties are authorized to apply to the MOM in order to try to reach a settlement, failing which, the employee may proceed in filing a claim in the Primary Court.