Oman's Supreme Committee has issued a series of decisions in the last few weeks in response to the COVID-19 pandemic.
Oman's Supreme Committee for Dealing with Covid 19 has issued a series of decisions in the last few weeks in response to the Covid 19 pandemic. This article recaps the key measures which are relevant to employers given the extension of the lockdown to 29 May 2020.
The most recent decision issued on 15 April 2020 (Decision) predominantly impacts the private sector labour market and is intended to alleviate some of the pressures that private sector employers currently find themselves under.
The Decision sends a clear message to employers that Omani employees should continue to be employed and should not be subject to dismissal during this current time. However, a number of measures may be taken by employers to alleviate financial pressures that they face. These include:
- requiring employees to take their annual leave in sectors that have been closed (as a result of Covid 19 restrictions);
- in relation to Omani employees, negotiate a reduction in salary for employees along with a commensurate reduction in working hours for a maximum period of three months starting May 2020, provided that these employees have taken their full annual leave entitlement;
- in relation to expatriate employees, reach agreement on payment of their salaries (which means that employers will have greater flexibility with expatriate employees);
- terminating expatriate employees if employers have been affected by the Covid 19 pandemic provided that they are paid all of their entitlements and are repatriated from Oman;
- redeploy employees to other employer entities within the same shareholding group;
- second/assign employees to other employers subject to a written agreement.
Aditionally, the Decision imposes obligations on employers to:
- implement remote home working and introduce technology to facilitate home working as much as possible to reduce the number of employees attending work places;
- implement social distancing in (i) the work place for those employees who are required to attend work and (ii) workforce housing;
- pay full salary to those employees who have been quarantined during an imposed quarantine period.
This latest decision marks a significant shift in stance in light of a historically protected labour market in times of previous financial crisis. Also a radical change is the sharing of employees between different employers, presumably as a measure to avoid termination of employees and the current inability to mobilise new employees into the country.
The reduction to salary is however only a temporary change (and in the case of Omani employees) for a maximum period of three months. The Decision states that an employer may negotiate salary reductions (when previously the Ministry of Manpower’s position was that any reductions were not permitted) inferring that employee consent is still required before salary reductions may be imposed. The Minister of Manpower has confirmed in a statement issued on 16 April 2020 that employee consent is required. However, in the event that agreement cannot be reached between the employer and employee, the issue may be referred to a committee appointed by the Council of Ministers to decide on the matter.
Whilst the Supreme Committee has given its endorsement to termination of expatriate employees, this will be subject to an employee’s ability to repatriate those employees, which, whilst borders are closed, will in practice make terminations difficult.
Ultimately, an expatriate employee will still be able to challenge the decision to dismiss before the Ministry of Manpower and the Oman courts by bringing a compensation claim for arbitrary dismissal. It remains to be seen to what extent these institutions will consider the impact of the Covid 19 restrictions on an employer’s business as justifying termination of an employment contract. Notwithstanding the Supreme Committee's Decision, an employer will be put to the test to provide evidence of financial losses suffered as a result of Covid 19 as a means to justify dismissal of employees.
For further information please contact our Oman employment team.