Learn about the legal processes for employee termination and severance in Oman
In Oman, the Labour Law outlines the necessary notice periods for terminating an employment contract. These periods vary based on the employee's salary structure and any contractual agreements.
It's crucial to note that these minimums are applicable unless a longer notice period is specified within the employment contract. Both employers and employees can mutually agree to a longer notice period if they wish.
The legal requirement for notice periods is not applicable during the employee's probationary period. Probationary periods in Oman can extend up to three months, and either party can terminate the contract during this period with just seven days' written notice if they deem the continuation of the employment unsuitable.
In Oman, the Labour Law stipulates the severance pay or end-of-service benefits that employees are entitled to upon termination of their employment, except in cases of termination due to gross misconduct.
Severance pay is calculated based on the employee's basic salary, excluding other allowances. The entitlements vary for expatriate and Omani employees:
The recent introduction of the Social Protection Law in Oman has established an end-of-service savings scheme, which will eventually alter the calculation of severance pay. The effective date for this scheme is yet to be announced.
Previously, under the Omani Labour Law, employees only qualified for severance benefits after one year of service. However, the revised Labour Law has removed this requirement.
It's important to note that employees dismissed for gross misconduct, as outlined in Article 40 of the Oman Labour Law, are not entitled to severance pay.
Terminating an employee's contract in Oman must be done carefully, adhering to the Omani Labour Law to avoid potential legal disputes. There are two types of termination: termination with notice and termination without notice. Both employers and employees can terminate the contract after providing a written notice period. This applies to fixed-term or indefinite contracts unless there's a breach or gross misconduct. Employers may terminate the employment contract without notice in specific cases of gross misconduct by the employee, as stipulated in Article 40 of the Omani Labour Law.
Oman Labour Law permits termination due to economic reasons, but it requires specific steps:
If an employee believes their termination was unfair, they can file a claim with the Ministry of Manpower's conciliation department. If an amicable solution isn't reached through conciliation, the case may proceed to the Omani courts.
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