Published on and written by Cyril Jarnias
Oman, a Middle Eastern country located on the Arabian Peninsula, offers an expanding labor market that attracts numerous foreign investors and workers. However, Omani labor law has specific characteristics that are essential to understand for anyone looking to establish themselves professionally there. In this article, we will explore various aspects of labor law in Oman, from employment contracts to workers’ rights, including compensation and social obligations.
Employment Contracts in Oman: An Evolving Legal Framework
The Omani legal system regarding labor law is primarily based on the Labor Law enacted by Royal Decree No. 35/2003. This law defines the different types of employment contracts and the rights and obligations of employers and employees.
Types of Contracts
In Oman, there are mainly two types of employment contracts:
- Fixed-term contract: This type of contract is concluded for a specific period, generally up to two years maximum. It can be renewed with the agreement of both parties.
- Indefinite-term contract: This contract has no predetermined end date and offers greater job security.
It is important to note that all employment contracts in Oman must be written in Arabic, with an English translation if necessary. The contract must clearly specify employment conditions, including salary, working hours, contract duration, and social benefits.
The Probation Period
Omani law provides for a probation period that cannot exceed three months. During this period, the employer or employee can terminate the contract without notice or compensation.
Contract Termination
Contract termination conditions vary depending on the type of contract. For an indefinite-term contract, a notice period of at least 30 days is generally required. For a fixed-term contract, early termination may result in penalties, except in cases of serious misconduct or force majeure.
Good to Know:
In Oman, employment contracts are strictly regulated by law. It is crucial to fully understand the contract terms before signing, as some clauses may be very different from those found in other countries.
Social Obligations: A System Undergoing Modernization
The social security system in Oman is constantly evolving, aiming to provide better protection for workers while remaining competitive for employers.
Social Security
The Omani social security system mainly covers Omani citizens. Employers are required to contribute 11.5% of their Omani employees’ base salary, while Omani employees contribute 7% of their salary.
For expatriate workers, the situation is different. They are generally not covered by the Omani social security system, but employers are required to provide them with health insurance.
Leave
Omani law provides for a minimum of 30 days of paid leave per year for employees who have worked for at least one year. Additionally, employees are entitled to paid sick leave, the duration of which varies based on seniority.
Maternity Protection
Pregnant women are entitled to 50 days of fully paid maternity leave. Additionally, for 18 months following childbirth, they are entitled to paid breastfeeding breaks.
Good to Know:
Although the social security system in Oman is primarily intended for Omani citizens, employers are required to provide basic social protection to all their employees, including expatriates.
Compensation in Oman: Between Minimum Wage and Competitiveness
The issue of compensation in Oman is a complex subject, influenced by various factors such as nationality, industry sector, and skill level.
Minimum Wage
Unlike many countries, Oman does not have a universal minimum wage. However, a minimum wage of 325 Omani rials (approximately 845 US dollars) per month has been established for Omani citizens working in the private sector. There is no official minimum wage for expatriate workers.
Average Compensation
According to available data, the salary range in Oman is between 750 OMR (approximately 1950 US dollars) and 2914 OMR (approximately 7570 US dollars) per month. These figures include bonuses and vary considerably depending on the position and industry sector.
Most Sought-After Skills
The highest-paying positions in Oman are generally found in the following sectors:
- Senior management (CEO, CIO, etc.)
- Engineering (particularly in the oil and gas sector)
- Finance and accounting
- Information technology
For example, a CEO can earn on average more than 5000 OMR per month, while an experienced engineer in the oil sector can earn between 3000 and 4000 OMR per month.
Good to Know:
Salaries in Oman are generally higher than in many other countries in the region, making it an attractive destination for expatriate workers. However, it is important to consider the cost of living, which can be high in some urban areas.
Unions and Workers’ Rights: A Delicate Balance
Labor law in Oman has seen significant developments in recent years, particularly regarding workers’ rights and union representation.
Unions
Until 2006, unions were prohibited in Oman. Since then, the law has allowed the formation of unions, but their power remains limited compared to what can be observed in many Western countries. Omani unions have the right to bargain collectively and represent workers in discussions with employers, but they do not have the right to strike.
Workers’ Rights
Omani labor law guarantees several fundamental rights to workers, including:
- Protection against discrimination based on gender, religion, or ethnic origin
- The right to a safe and healthy work environment
- The right to paid leave and end-of-service benefits
- Protection against wrongful termination
Dispute Resolution
In case of conflict between an employer and an employee, Omani law provides a dispute resolution process. Workers can file a complaint with the Ministry of Labor, which will attempt to resolve the conflict through mediation. If mediation fails, the case can be brought before labor courts.
Good to Know:
Although workers’ rights in Oman have significantly progressed in recent years, challenges remain, particularly regarding the protection of expatriate workers and strengthening union power.
Conclusion: A Labor Market in Transformation
Labor law in Oman is constantly evolving, seeking to find a balance between protecting workers’ rights and maintaining a business-friendly environment. Although significant progress has been made in recent years, particularly in terms of union representation and social protection, challenges still remain.
For companies looking to establish themselves in Oman or workers considering a career in this country, it is crucial to fully understand the specificities of local labor law. Employment contracts, social obligations, compensation, and workers’ rights can differ significantly from what is found in other countries.
However, with its strategic position, growing economy, and dynamic labor market, Oman remains an attractive destination for many professionals and investors. By staying informed about labor law developments and strictly respecting local legislation, it is possible to fully benefit from the opportunities offered by this expanding market.
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Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
