Know Oman: Can you be laid off during COVID-19?

Muscat: Private sector employees in Oman cannot be dismissed from their jobs without a proper reason, unless their employers’ business is facing exceptional circumstances, a senior lawyer in the country has said.
Although companies are not allowed to fire their staff even if they’re facing financial troubles, they have been allowed to do so during the ongoing COVID-19 pandemic, according to Yasin Chowdhury, Head of Corporate Advisory at Al Faqih and Co, a legal firm in the Sultanate.
“There are two situations of termination being discussed now: The first is the pre-COVID-19 era, and the second is the era during COVID-19,” he said. “Before, during normal times, there were some checks and balances for employers to justify their termination decisions, and the very decision for termination would be rendered unfair dismissal by the court, unless there is a valid reason to do so by the employer."
“However, the de facto position of termination by the employer has greatly been changed, as the Supreme Committee to deal with COVID-19, on April 15, 2020, announced that given the situation due to COVID-19, the employer may actually terminate the employees after they can justify such termination,” added Chowdhury.
“The committee had said that the company needed to first exhaust the annual leaves of their employees, and they then needed to try to settle with the employees by coming into agreement with employees for payment of salaries, possibly, reducing salaries in consideration of reduced working hours,” he went on to say.
“If there is any disagreement in salary reduction for Omani employees, the ministry will intervene and take things forward,” he explained.
“But for expat employees, if things are quite similar...only one exception is there. If needed, after, following the first and second step, they can terminate the employee, if so required by the business.”
Chowdhury said, generally, according to the Labour Law, there are five situations under which a contract of employment may come to an end.
According to Article 43 of the law, the first reason for termination is due to expiry of the employment period, the second is in the unfortunate case of the death of the employee, while the third is owing to any disability suffered by the employee. Fourthly, on the basis of the employee tendering his resignation, or the employer choosing to dismiss the worker in question. And finally, due to an employee becoming so sick to an extent that compels him to discontinue his work for a continuous or an interrupted period of not less than ten weeks during one year.
“The Labour Law of Oman is actually very pro-employee,” explained Chowdhury. “This is a very positive sign for expatriates who come to Oman to earn money. One of the positive sides of the employment law of Oman is that there is no redundancy or termination in general. There cannot be any redundancy, simply on the basis that the company is facing financial troubles, or the company is facing cash flow issues or cash flow problems."
He added that cash flow issues alone were not a sufficient reason for employers to terminate people. However, even in the current situation of COVID-19 where employers are allowed to terminate employees if their business is affected, this in turn requires that termination decisions by employers even in this COVID 19-era should be justified on the ground of business being affected. Thus it is open to challenge a termination by employer even in this COVID-19 situation and to make a claim for unfair dismissal in the court. If proven, employee may be entitled to reinstatement or compensation of 3 months’ salary at minimum extent. Employers must comply with notice period, pay all the entitlements and arrange for repatriation. In case of employers’ failure to give notice, the employee in question must be provided compensation for the notice period.
“If, for example, the employment contract states there is a three-month notice period to be served, then the employer must alert the employee three months before termination, subject to the grounds mentioned in the law, and if he is not able to provide this notice period, then he has to provide payment for the entire time. If it is a three-month period, then has to pay for that entire period,” said the lawyer.