Disclosure of Confidential Information by Employees

Following a previous article on the provisions applicable to termination of employees found guilty of misuse of confidential information acquired during their employment, this article will focus on the provisions applicable to the employer’s confidential information under the Omani Labour Law, the Civil Code and the Penal Code.

Article 27 of the Labour Law, which lists the employee’s main obligations, states under item (4) that the employee is obliged to keep the secrets of its work.  Furthermore, Article 40(5) permits the employer to dismiss the worker with immediate effect and without payment of end of service benefits (if applicable) if the employee discloses any confidential information in relation to the employer’s business.

In summary, the Labour Law is clear in stating that, subject to the statutory disciplinary procedures and timelines, actual disclosure by an employee of its employer’s confidential information is a legitimate reason for immediate termination of an employment contract.

The same concept is re-stated in the Oman Civil Code under Article 657 which lists the main obligations of employees, including the obligation to “keep the industrial or trade secrets of the employer, including after the termination of the contract, as required by the agreement or by custom.”  Interestingly, the access to trade secrets and the obligation of confidentiality are linked to the possibility to validly enter into a non-competition agreement.  Article 661 provides that, if the work of the employee is such as to permit him to have access to work secrets or to make acquaintance with the customers of the business, the parties (employer and employee) may agree that, after termination, it would not be permissible for the employee to compete with the employer directly or to enter into an employment relationship with a business which competes with the employer, provided that such agreement is valid unless it is limited in time, place and type of work to the extent as may be necessary to protect the lawful interests of the employer.

Finally, Article 671 specifically provides that no claims arising out of a contract of employment shall be heard after the expiration of one year from the date of the termination of the contract except for the actions pertinent to disclosing trade secrets.

In addition to the serious consequences of any such disclosure under the Labour Law and the applicable provisions of the Civil Code, Oman’s Public Prosecution, in the framework of its awareness building programme, has recently issued a note of precautionary advice addressed to the general public.  Public Prosecution underlines that breach of confidentiality in respect of work secrets and confidential information is a punishable offence under the Omani Penal Code if the person committing it is a public official.

Book 2, Chapter 3 of the Penal Code deals with a number of criminal offences that may be committed by public officials in the context of their duties.  Article 201 provides that “any person who discloses job secrets shall be punished with imprisonment for a period of not less than three months and a fine of RO 1,000.”  The employee’s retirement and the termination of the employment contract do not preclude the application of this Article.

Similar provisions are found in many jurisdictions but the definition of “Public Official” under the Penal Code is rather wide as it includes, in addition to persons holding a government office and “persons assigned to carry out specific work by a competent public authority,” employees of wholly owned government companies or of companies with government participation in excess of 40%.

Considering the large percentage of government employees among the Omani population and the structure of the local economy, where government investment is a rather common feature in a large number of major corporations, this definition applies to an arguably far larger number of employees than in most other jurisdictions.  Further, employees of government-owned or -participated companies are considered private sector employees and, as such, subject to the Labour Law, leaving open the issue of the interaction between the relevant provisions set out in the pieces of legislation considered.