Oman New Labour Law offers better entitlements and reduced work hours

The Cabinet of the Sultanate of Oman has recently introduced a new Labour Law (Oman Sultani Decree No. 53 of 2023), the main law that sets out the terms and conditions for employment in the private sector, marking a significant update after two decades, as reported by Clyde & Co.

The New Labour Law has replaced the entirety of the previous legislation (Oman Sultani Decree No. 35 of 2003) and becomes effective on July 31, 2023. The changes are extensive, encompassing areas such as dismissal, employment contracts, performance appraisals, and work rules.

The legislation, among various provisions, reduces the maximum daily working time from nine to eight hours and extends daily breaks from 30 to 60 minutes.

Omani employers have been granted a grace period until January 31, 2024, to adjust their policies. Despite the pending publication of implementation details and a potentially prolonged review process, employers are urged to proactively prepare.

Significant changes as per the new law:

• Reduction of the maximum daily working time from nine to eight hours and extends daily breaks from 30 to 60 minutes.
• Introduction of novel types of work arrangements, including casual, temporary, part-time, and remote work.
• Introduction of a seven-day paid paternity leave entitlement.
• Extension of sick leave from 10 weeks to 182 calendar days, with full pay for days one to 21, 75% pay for days 22 to 35, 50% pay for days 36 to 70, and 35% pay for days 71 to 182.
• Extension of maternity leave from 50 to 98 calendar days and removal of a limit on the number of times maternity leave can be taken (previously restricted to three times with a single employer).
• Expansion of employer-paid bereavement leave from three to 10 days for the death of a child or wife and introduction of a new entitlement of 14 days for the death of a husband for non-Muslim widows.
• The granting of new mothers one hour of daily paid time off to care for their child and allowing up to one year of unpaid childcare leave.
• Declaration that dismissals based on discriminatory reasons (such as sex, origin, colour, language, religion, creed, social status, disability, pregnancy, childbirth, breastfeeding, or affiliation with a labour union) are considered unfair dismissals.
• Declaration that unfair termination may result in reinstatement or compensation (3 to 12 months’ salary). Employees also keep statutory and contractual entitlements upon termination, potentially affecting compensation compared to the previous law.
• Enablement of employers to opt for unlimited or limited-term contracts. Limited-term contracts are limited to five years, turning into unlimited term if the initial or combined duration exceeds five years.
• Transfer of the responsibility for payment of the above leave and other paid leave from the employer to the Social Protection Fund (to be established by the Social Protection Law) once it is created (excluding the initial seven days of paid sick leave).
• Declaration that companies with 25+ employees need Ministry of Labour approval for “Omanization” plans (subject to approval by the Ministry of Labour), prioritizing Omani hiring.