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General Laws and Interpretation -Sultanate of Oman

Perspicuous edition 2014

Dedicated to Newtons and Martins

With Gratitude , To Elsela-God our Rock

INTRODUCTION

With special emphasis on the Oman labor law, this book delves into certain radical amendments in brief from 2011 to 2013 in the form of ministerial decisions, through which, the law makers in the jurisdiction, strived to strengthen the socio-economic structure of Oman as a productive economy on one hand, and also reflects on how the implementation of such ministerial decisions received a blow at the inception and took time to settle down in the minds of the governed. The book in its last chapter suggestively deals in brief with general legal principles in the Sultanate of Oman and certain concepts that it advisedly ought to integrate in its legal system as an emerging constitution. This book is Part I of the five part series.

Chapter 1 Oman Labour Law-Amelioration with radical amendments (With epigrammatic upshot of the Ministerial decision 222/2013)

Over the years Oman has witnessed radical changes in its legal system through varied laws and the interpretation of the laws.

With special emphasis on the Oman labour law, I believe through a number of radical amendments and ministerial decisions the law makers have strived to strengthen the socio economic structure of Oman as a productive economy.

Generally Labour Legislations are constructively fortified with the goal of revitalizing the socio-economic fabric of the country through their malleable yet firm provisions, which hypothetically works its way through harmonising the relationship between employer and employee.

In the labour law perspective; whether it is the common Law system, or Scandinavian legal system; be it French legal system or the Chinese or even the religious legal system, all aim at improving the productive relations between employer and employee, by securing the rights and interests of the employee on one hand as well as the employer and stakeholders on the other; considering the complex trellis of interests amidst conflicting demands in the commercial arena. Labour laws across the globe, by and large establishes basic legal rights and a just redressal mechanism.

Over the years there also has been a transitional shift of labour legislations being exclusively employee oriented to advanced socio-economic lex of harmonious construction, emphasising on the overall development of the economy builders (work-force) of the nation.

The Oman Labour law gets concretised by the Ministerial decisions taken, authenticated and promulgated contemporaneously.

One such laudable Ministerial Decision is, MD 222/2013, on 325 OMR as basic pay packet to the national work force.

However, the said MD 222/2013 meant for a positive impact, created much astonishing clamour among the workers community where some corporate houses even experienced notice of strikes etc.

Thus it is important to foresee and understand the impact any particular promulgation/ law can have, when promulgated and implementation sought; especially on commercial negotiation, litigations that may arise consequently, possible misinterpretation of a statute etc.

In the law receiver’s perspective (the corporate, employer, employees, citizens, legal fraternity, and the society at large) paramount quandary is of “right interpretation”.

Interpretation of statutes and promulgations receives a major blow when it comes to swift compliances within a short time period of intense promulgations.

For instance:

MD 222/2013

Some of the ramifications of this constructive promulgation are as follows:

The said MD in its brevity confounded the employers, due to phenomenal and sudden demands from the employees.
Though the said MD was highly appreciable promulgation in the labour law perspective, interpretation of the said MD was done at each company in the way each HR dept understood and each followed a distinct calculative procedure, thus creating more confusion in the minds of both, the employer and employees, where some even failed to distinguish between the term “allowance” and “bonus”.
Thus, varied principles of the same MD 222/2013; however internal disputes sorted out through negotiations etc; and the stakeholders opting for the candied interpretation of law.
Some companies experienced receipt of strike notices.

Some of the queries:

1. Can the basic salary of an Omani employee be reduced to meet the 325 OMR mandate?

To this it’s a simple “No”.

The basic salary should be minimum225 OMR and allowances shall total up to minimum 100 OMR.

2. What does “minimum “mean?

It simply means – that the basic salary shall not be less than 225 OMR and allowances not less than 100 OMR and over all thus not less than 325 OMR.

3. Suppose an employee is receiving basic salary of 300 OMR and allowances of 90 OMR does this come within purview of this MD.

Here again –“No” since the minimum allowance requirement is not met.

4. As in case at serial number 3 can the basic salary be reduced to increase the allowance to 100 OMR?

“No” Article 2 of the referred MD clearly states that the basic salary cannot be altered of those whose salaries are more than the minimum limit.

5. According to 222/2013 what are “allowances”?

MD 222/2013 has not defined “allowances” simply because, the fundamental law pertaining to labour that is, the Oman labour law has a referential explanation on allowances. Moreover apart from those basic allowances mentioned in the statute, additional allowances are in practice given by most companies, in the best interest of their employees. Thus “allowances” cannot be defined as only “a” “b” or “c” in addition to the statutory allowance.

As per the latest amendment (Royal Decree number 113/2011 published in Official gazette on 24 Oct 2011) in this direction, with respect to definition as identified and incorporated subsequently in the law is as follows:

Article 1 (12) of labour law defines Basic salary as “The payment agreed upon between the employee and the employer in cash as stated in the work contract in addition to periodical allowances.”

Article 1 (13) defines Gross wage as “The basic salary in addition to all other allowances payable to the employee in return for his work.”

Thus ‘allowances’ include all allowances, payable to the employee for his work; which means the definition is made comprehensive to include all considerations of his work in addition to his basic salary.

The Royal Decree 113/2011 has amended the definition of gross salary by including all allowances, such as travel, transport and housing allowance, in addition to the basic salary.

Earlier, travel, transport and housing allowance was not considered to be part of the gross salary.

Thus Gross salary includes: (all allowances) I. Travel II. Transport III. Housing…. (As per the law)

IV. AND (interpretatively) any other allowance which may be given by the employer at his instance/by his discretionary elect, in the best interest of the employees. The law does not restrict allowances only to travel, transport, and housing. The three allowances specifically mentioned are minimum nitty-gritty. Thus the said 3 allowances of travel, transport and housing are indispensable in nature and provided by the law. While in addition any other allowance that may be given is at the employer’s discretion such as Utility allowance, or cost of living allowance-COLA, or telephone allowance, mobile allowance, petrol allowance, any other “x” allowance etc in the best interest of employees.

6. Can an employer withdraw any allowance scheme provided, earlier to this promulgation, and after this promulgation of minimum 100 OMR allowance, can the employer withdraw or strike off any of the previously allocated allowance?

The employer is encouraged not to retract from the terms of the employment contract entered into with the employee, in line with the PPP manual and the law as a whole.

If the employer has been paying more than 100 OMR, to any specific employee, it doesn’t mean he should reduce the allowances to match the 100 OMR criteria, and if in certain cases where any specific employee has been receiving less than 100 OMR with several demarcates within, encompassing statutory housing, travel and transport, then the allowances are permitted to be increased to match the 100 OMR criteria.

{Thus in practice the manner and method of segmenting and distributing such allowances is subject to mutual agreement between parties as set out in the employment contract, R/w PPP Manual of the company ,Oman labour law, and Ministerial Decisions.}

It needs to be understood that Ministerial Decisions are succinct promulgations which serve as lubricant to the wheels of law, which needs to be mandatorily complied with. For interpretation of MD’s it must be read with the governing laws in each subject of promulgation for better understanding and implementation.

The intention of the legislature has also to be looked into primarily.

Legislative intent warrants its central, constitutionally legitimate place in interpretation.

Precipitous conclusions on new promulgations advisedly have to be avoided and implementation of the same has to be with the right motive as a means to an end.

MD’ s with respect to labour law, are soon to be incorporated in the new version/amended labour laws to be promulgated in the months to come, which is expected to iron out the creases with a consolidated approach.

CHAPTER 2 Nuts and Bolts on handling Labour grievances, with special reference to recent ministerial decisions-Oman

The Governing law-Sultanate of Oman, Ministry of Manpower-Labour law.
- The Constitutional law of Oman guarantees Omani nationals the right to work, prohibits compulsory labour (except for the performance of public services for a fair wage), prohibits discrimination between citizens and generally addresses all employment issues. The Omani Labour Law (the Law) (Royal Decree 35), 2003, governs specific labour and employment-related issues. In addition to the Constitution and the Law, Ministerial Decisions issued by the ministry of manpower (the ministry) and the Social Insurance Law also apply to the private sector workforce.
- The Law does not apply to civil servants, military, security or police personnel, or domestic service/household employees. Civil servants are covered by the Civil Service Law, and military and police personnel are covered by the Military Service Law. Domestic service/household employees are covered by Ministerial Decisions.
- Js a reference to Oman labour law Article (50):”The Council of Ministers shall determine the minimum limit of wages according to the requirements of the economic circumstances and may determine a minimum limit of the wages of a specific category of workers who are occupying jobs or occupations, the conditions or nature of the work of which necessitate such determination. The minimum limit of wages shall be issued by a decision of the Minister.”
- Article (50 bis)”The Minister shall issue a decision to determine the minimum periodical allowances and the procedures and conditions for their payment”

Thus, evocatively, the ‘benefit and security of the employees in Oman’, is the cornerstone of Oman labour law, assuring enhancement and safeguarding of employee interest, on one hand and regulating employer-employee relations on the other.

The legal characterization of basic wage and gross wage.

The intention of the legislature has to be looked into primarily., legislative intent warrants its central, constitutionally legitimate place in interpretation.

a) As per the latest amendment (Royal Decree number 113/2011 published in Official gazette on 24 Oct 2011) in this direction, with respect to definition as identified and incorporated subsequently in the law is as follows:

Article 1 (12) of labour law defines Basic salary as “The payment agreed upon between the employee and the employer in cash as stated in the work contract in addition to periodical allowances.”

Which means consideration in cash, in addition to any periodical increments is now the sole constituent to determine an employee’s basic salary.

Article 1 (13) defines Gross wage as “The basic salary in addition to all other allowances payable to the employee in return for his work.”

Thus ‘allowances’ include all allowances, payable to the employee for his work; which means the definition is made comprehensive to include all considerations of his work in addition to his basic salary.

The Royal Decree 113/2011 has amended the definition of gross salary by including all allowances, such as travel, transport and housing allowance, in addition to the basic salary.

Earlier, travel, transport and housing allowance was not considered to be part of the gross salary.

Thus Gross salary includes: (all allowances

I. Travel

II. Transport

III. Housing

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