The Sultanate’s labour laws: A bird’s eye view

Earlier series of articles in this column elaborated upon the Oman consumer protection law which is based on fiduciary obligations — highest standard or degree of care owed by a person or class of persons (trader) to another (consumer).
In most countries around the world, like consumer protection law or legislation, labour law also implies fiduciary obligations owed by one person or class of persons (employer) to another person or class of persons (employee).
Although, like consumer protection law, employment law is a contractual relationship between two parties, the presumption under the law is that the employee too is in a weaker bargaining position viz a viz the employer, who is in a position of power and control over the affairs of the employee.
Hence the law seeks to confer certain minimum protections on employees to protect them against exploitation by the employer.
The main body of the Oman Labour Laws is contained in Royal Decree 35/2003 as amended (OLL) and ministerial decisions and circulars issued from time to time by the Oman Ministry of Manpower (Ministry) which oversees the application and enforcement of the OLL in the Sultanate of Oman.
OLL is comprehensive legislation that is textually detailed and contains rules and standards covering the entire spectrum of employment affairs. OLL contains one hundred and twenty-five (125) articles divided into ten (10) parts.
Whilst it is not possible to elaborate the entire spectrum of rules contained in OLL in one article, this article and the second in the series of articles on OLL will provide a general overview of the OLL, in particular the minimum standards mandated by OLL.
OLL applies to all kinds of public and private establishments and their foreign branches operating in Oman and employing any employees. OLL contains severe penalties for establishments or companies seen to be violating OLL.
OLL defines “employer” as a natural person or body corporate employing one or more employees in return for a wage while an “employee” is defined as a natural person working in return for a wage for an employer under his management and supervision. All natural persons employed in Oman — whether Omani or non-Omani — are deemed employees for the purposes of OLL.
The legislative intent underpinning the OLL is clear from a plain reading of Article 3 which states that conditions infringing provisions of OLL shall be null and void, even if applicable previously, unless they give greater benefit to the employee. Article 3 further provides that settlements, release or waiver of rights shall be null and void, if they violate the provisions of OLL.
The obvious effect of Article 3 is to state the overarching principle that if there is any conflict between employment contracts with provisions of OLL, provisions of OLL shall prevail to the extent of the conflict and the contradictory contractual provisions if any in an employment contract will be null and void ie of no legal effect. Moreover, no settlements, releases or waiver of rights of employees shall have any legal force or value — or withstand the test of judicial scrutiny if challenged before Omani Courts — if they contravene the provisions of OLL. Article 3 bis, a subsequent amendment to Article 3, prohibits any form of coercive or forcible labour.
Another key rule underpinning OLL is set out in Article 5 which requires employers to provide or at least maintain the minimum limit of the standard and conditions of employment laid down in OLL.
It is pertinent to note that under OLL, employees can claim an entitlement stipulated in OLL within a period of one year from the date of such entitlement. In other words, all claims of employees under OLL will be time-barred if they are raised beyond the above one year period.
In addition to the above general principles, OLL contains detailed rules on various aspects of employment such as mandatory clauses to be included in the employment contract, including but not limited to basic personal details of the employee, wage entitlement and notice period for termination of the employment contract.
Whilst all employment contracts are required to be registered at the Ministry in the standard form prescribed by the Ministry, OLL makes provision for parties to annex supplemental terms and conditions which would form part of OLL.
The supplemental terms and conditions have the effect of elaborating upon the contractual relationship between the parties. Provided that the supplemental terms and conditions are not in contradiction with the OLL, they would be deemed lawful and form part of the overall employment contract.
It is always advisable for parties to err on the side of caution and to set out the entire scope of the duties, obligations and responsibilities owed by them to one another in the form of supplemental terms and conditions.
In our experience, Omani Courts are very fair in disposing of employment disputes and unless either party succeeds in convincing the Court that there was a specific violation of the OLL or the employment contract, Omani Courts would rule in favour of the non-breaching party.
The next article in this column would touch upon the different types of employment contracts recognised under OLL and what constitute valid and recognized grounds for termination of employment contract recognized by OLL.
[Hassan Shad is General Manager — ARAB Advocates and Legal Consultants, Muscat]

By Hassan Shad
hassan.shad@arab-law.om