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Outcry in Oman over early Eid pay from private sector bosses
July 7, 2015 | 8:53 PM
by ELHAM POURMOHAMMADI/FAHAD Al GHADANI
 
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Muscat: Private companies should not be forced to pay salaries earlier as it disturbs their financial plans, and some companies cannot afford to do so, say members of the business community.

The Ministry of Manpower has made it clear that companies must comply with the decision regarding early payment of salaries in July, and any company violating the decision will face legal action, a reliable source at the ministry told the Times of Oman.

According to the ministerial decision, salaries of private sector employees should be given by July 14 due to Eid Al Fitr.

“This is a ministerial decision and all private companies should abide by it,” said the source, and added that employees who do not get their salaries by the deadline should report it to the ministry.



“The Ministry of Manpower will then investigate the company, and if found guilty it will face legal action,” he said.

However, businessmen in the private sector say it is in an unfair decision and puts undue financial burden on companies.



Ahmed Al Hooti, a member of the Oman Chamber of Commerce and Industry (OCCI), believes that the decision should be revised in the future as it leads to certain problems. “I believe, the government sector knows the situation, so it depends on them. But as far as the private sector is concerned, it is best left to the employees,” he said.

The employee should be given the choice and an advance payment can be made based on their requirements, he added.

“Today in the private sector, we have more than one million employees and just 20 per cent of them are Omanis. So the Omanis may need their salaries earlier, but the rest probably do not, and that creates quite a few problems,” he said.

“We do not want to force employees to take their salaries earlier,” he said, and added that employees may face some issues as they will have to wait longer for the next salary.

Sultan Ali Al Busaidi, managing director (MD) of the United National Oilfield Services (UNOS), a new generation start-up company, said that the ministry should revise the decision.

“Monthly financial (outlays) have to be planned very much in advance, and normally salaries are hitting our accounts on the 25th of every month,” he said, and added that it would be difficult for companies to pay salaries earlier.

It is not a ‘fair’ expectation from the private sector as the ministry does not know the financial situation of private companies, said Al Busaidi. The ministry should have a clearer vision of the situation, he added.

Negative impact

The MD of UNOS, a 100 per cent Omani initiative, also said that the decision to pay salaries earlier could cause financial hardships to some people after Eid.

He said, “It is good that people will have money to spend in Eid, but what next?”

Eid is the time to spend money and you spend what you have, said Al Busaidi, adding, “One tends to spend a lot if one has a lot of money.” After that, employees will start borrowing money to cover other expenses, he noted.

In addition, an Omani business owner in the private sector, who asked not to be named, said that not all companies have the financial resources to pay salaries before July 14, as requested by the Ministry of Manpower.

“The ministry should not issue such orders and should stop interfering in the working of private companies. Some companies may have the money to pay salaries earlier, but what about the companies which cannot afford to?” he asked.

He said that the ministry does not understand the situation faced by companies and such an order just disrupts their financial plans.

Order

After the issuance of this order, some companies are refusing to pay bills to other companies because they have to pay salaries earlier. That is delaying the collection of companies who have to receive the money,” he said.

He added, “It is wrong of the ministry to issue such an order. If they want to help employees, they should leave it to the company and the employee to decide. Maybe, some company might want to give 50 per cent of the salary in advance and give the rest at the end of the month.”

The business owner also noted that some employees misuse the salaries they receive in advance and overspend on Eid shopping, when even Islamic teachings say that one should not spend more than what one can afford.

“At the end of the month, they do not have enough money to pay the rent or for other essential items. So, they end up borrowing money, and next month their productivity is low because they are distracted by financial problems,” he claimed.

Protesting the decision

“Companies must protest and should not entertain this demand. If they cannot afford to pay the salaries earlier, should they be taken to the court because of something that the ministry has itself created?” asked the business owner.

Also, there will be companies which do not abide by the ministry’s decision and any action against them would be unfair, he said.

The ministry should not act in a ‘dictatorial’ manner, he noted.

“The ministry has already imposed a burden on the private sector with its Omanisation policy and this decision is putting undue pressure on companies,” he added.

Haidar, an Omani economic expert, says that the decision to pay the salaries earlier is made to help those who may be spending more on this special and celebratory occasion, including Eid shopping, and also those who have to transfer money abroad.

Companies are asked to pay salaries earlier as families of some workers live outside the country and they have to send money home before the banks close for several days, he said. The advance payment is only a matter of a few days, he added.

Haidar, however, cautioned employees to spend wisely and manage their finances well to avoid any financial pitfalls.

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