After 20 years of the old Omani Labour Law governing employment matters, the Sultanate has introduced a law replacing the old one in its entirety. The new Labour Law promulgated pursuant to Royal Decree No. (53) of 2023), has become effective as of 1 August 2023. While it is now in force, its Executive Regulations are yet to be issued. The new legislation modernizes Oman’s employment framework, introducing provisions such as remote work – previously unrecognized under the old law (Royal Decree No. 35 of 2003). Below are the key changes:
A. Omanization:
Aligned with GCC-wide trends, the law prioritizes workforce localization. Key provisions introduced in this regard include explicit designation of employment as a right of Omani nationals and a requirement on employers with 25+ employees to comply with governmental-mandated Omanization quotas. The Ministry of Labour will define the Omanization-targeted jobs and their percentages.
B. Compensation for Unfair Dismissal:
If the matter is brought up before the courts and the termination of the employee is deemed to have happened based on unfair grounds, the courts, pursuant to the new provisions, decide to:
- Reinstate the employee in the previous position; or
- Award compensation to the employee of no less than 3 months’ full salary and not exceeding 12 months’ full salary.
C. New Leaves:
Beyond unchanged entitlements (e.g., annual leave), the law introduces new types of leaves:
- Paternity Leave. 7 days.
- Accompanying Leave. 15 days (for Omani employees to care for a spouse or 1st/2nd-degree relative).
- Unpaid Childcare Leave. 1 year (for female employees)
D. Working Hours:
The new law reduced the total number of working hours from 9 hrs/day to 8 hrs/day. As a consequence, the midday break, which was 30 minutes under the old law, has been increased to 1 hour by the new law. Looking ahead, employers have 6 months to align with the new law’s provisions, while the executive regulations remain to be seen.
Nadim El Jisr