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.

Notice Periods Based on Salary Structure (Article 38)

• For Monthly Salary: Employees who receive a monthly salary need a minimum notice period of 30 days prior to termination.
• For Other Pay Structures: For employees on weekly or other pay structures apart from monthly, the minimum notice period is 15 days.

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.

Exceptions: During Probationary Period

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.

Calculation of Severance Pay

Severance pay is calculated based on the employee's basic salary, excluding other allowances. The entitlements vary for expatriate and Omani employees:

• Expatriate Employees: They are entitled to a full month's salary for each year of service.
• Omani Employees: They are entitled to 15 days of salary for each of the first three years of service, and 30 days of salary for each subsequent year of service.

Key Points to Note

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.

Types of Termination

• Termination with Notice: This applies to fixed-term or indefinite contracts unless there's a breach or gross misconduct.
• Termination without Notice: Employers may terminate the employment contract without notice in specific cases of gross misconduct by the employee. These include reasons such as adopting a false identity or submitting forged documents, committing an error resulting in substantial material loss to the employer, disregarding safety instructions, assaulting the employer or a colleague at work, or absence from work without valid reason for more than seven consecutive days or ten separate days in a year.

General Termination Procedure

1. Written Notice: Whether terminating with or without notice, the terminating party (employer or employee) must provide a written notice clearly stating the reason for termination and the effective termination date.
2. Repatriation (Expatriate Employees): The employer is responsible for the cost of repatriating an expatriate employee and their family to their home country at the end of employment.

Termination for Economic Reasons

Oman Labour Law permits termination due to economic reasons, but it requires specific steps:

1. Notice to the Ministry of Labour: The employer must submit a written notice to the Ministry of Labour three months before any termination due to economic reasons.
2. Committee Approval: The employer must obtain approval from a specially formed Ministry of Labour committee to ensure the terminations are necessary for the business's survival.

Dispute Resolution

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.