The Oman Council of Ministers has ordered the setting up of a team including international experts to help revise the Oman labour law.

The team will also include representatives of the ministries of manpower, commerce and industry, oil and gas, tourism, the Oman chamber of commerce and industry and the general federation of Oman trade unions according to Oman minister of manpower, Abdullah bin Nasser al Bakri, in an address to the Majlis A’Shura at the beginning of February. Al Bakri said that his ministry is in the process of floating a tender to international experts but stressed that the terms of reference would not extend to re-writing the law which is already in draft form. The ministry is also working on setting up a regulatory board for private sector institutions to determine rules and criteria on recruitment, salaries, training, promotions and qualifications of private sector employees.

Private sector companies will face increased scrutiny from January 2014 over compliance with new salary protection rules according to Suhail Yahya al Khasabi, the head of the ministry of manpower’s salary protection centre.

The Salary Protection System (SPS) is a national electronic platform implemented jointly by the ministry and Central Bank of Oman which requires employers to pay all staff salaries through authorised financial service providers in the Sultanate in accordance with article 53 of the Oman labour law.

The primary objective of SPS is to ensure that workers are paid on time and in accordance with contract in order to avoid disputes. The ministry receives 5,000 to 10,000 complaints from Omani and expatriate workers relating to non-payment of wages every year. The system is particularly beneficial to low-salaried and uneducated employees who are vulnerable to exploitation by employers. A further advantage of the SPS will be the availability of a real-time database on the labour force which can be used for a number of purposes such as to monitor private sector companies’ compliance with labour-related policy such as Omanisation policy and to identify the employment of illegal workers.

The Oman minister of manpower, Abdullah bin Nasser al Bakri, outlined key features of a proposed new labour law at a seminar hosted by the College of Tourism at the end of January.

According to the minister, the law introduces detailed provisions on occupational health and safety, labour inspection, trade unions and collective bargaining and the resolution of disputes. The law, currently in draft form, also envisages the establishment of a number of independent legal entities such as:-

• 1. a specialised new labour court to be set up by royal decree;
• 2. an independent commission for dispute resolution to mediate labour disputes, including union disputes, with the power to refer cases to either arbitration or to the labour court;
• 3. a high-level social dialogue committee to propose and comment upon draft laws impacting economic policy and to which Omanisation committees for different sectors of the economy would report.

The seminar was attended by key government officials, media and union representatives and leading NGOs and follows a 3-week online survey conducted by the Ministry as part of its public engagement and consultation process on the new law. The labour law revisions aim to improve significantly workers’ pay and conditions with the twin objectives of attracting to the private sector the tens of thousands of young Omani nationals entering the job market every year, and of meeting International Labour Organisation (ILO) standards.

Oman has not yet ratified the ILO’s Freedom of Association and Protection of the Right to Organise Convention (C.87) nor the Right to Organise and Collective Bargaining Convention (C.98). Although the ILO cannot itself impose sanctions for failure to meet its standards, Oman is specifically required to implement them under the terms of the United States-Oman Free Trade Agreement (FTA) or to compensate in the form of monetary fines and the loss of trade benefits with the United States.

• the number of working hours does not exceed 4 per day;
• the wage per hour is not less than OMR3;
• the part-time employee is a job seeker;
• part-time employees aged 16 work only between 6am and 6pm;
• the ratio of part-time workers is not more than ten per cent of the Omanisation ratio.

Qualifying businesses are sale of foodstuff, fuel pumps, hotels, restaurants and coffee shops, electronic and electrical goods, storehouses, vehicle showrooms, agricultural businesses, exchange, children and elderly care, travel and tourism agencies, driving schools, educational and medical services.

In order to satisfy Oman labour law requirements, part-time contracts must specify hours of work, days of work, hourly rate of pay and payment intervals of a week unless the employee agrees to a two-week or monthly basis. Either party may terminate the contract upon 3 days notice in writing. The employer is obliged to provide the ministry of manpower with names and designations of all part-time employees.

This decision is the latest in a raft of government measures in 2013 aimed at increasing the number of Omanis entering the private sector after statistics reveal a scant 1.7% rise in the period 2010 to 2013. Measures include the introduction in January of an annual minimum three per cent pay rise and an increase in the minimum wage by over 60 percent from RO 200 to RO 325 effective July 1, a move the government estimates will benefit around 122,000 out of the 172,000 Omanis working in the private sector.
The government also approved a move to cap the expatriate population in Oman at 33% of the total after statistics reveal a leap of 106% to 44% of the total population during the period 2010-2013. In an initial step, the Ministry of Manpower temporarily suspended under article 19 (4) of the labour law the issue of visas to expatriates working in the construction and cleaning sectors for a period of six months from November 1 until May 2014. Companies rated as ‘excellent’, international companies, companies carrying out government projects and consultancy firms are excluded from the ban.

Meanwhile, the authorities are striving to encourage the growth of small and medium-sized enterprises (SMEs) by ensuring that loans are easier to secure. The Central Bank of Oman has mandated all all banks operating in the Sultanate to lend a minimum 5% of their credit portfolios to small- and medium-sized enterprises (SMEs) by December 31, 2014.