Oman
Basma Al Kiyumi Partner, Head of Dispute Resolution - Oman
Wassim MahmoudLegal Advisor
Oman has embarked on a significant journey to reform its labour environment, marked by the enactment of the Oman Labour Law Sultani Decree No. 53/2023 on 25 July 2023. This landmark legislation, the most substantial reform since 2003, underscores the country's commitment to enhancing labour relations and conditions. Complementing this law, the Ministry of Labour has issued several pivotal decisions aimed at refining the labour market dynamics between employers and employees in the private sector. Looking ahead to 2025, further legislative changes are anticipated, including regulations on casual, temporary, part-time, and remote work, as well as the establishment of a special committee to address redundancy applications. These forthcoming changes are expected to provide greater flexibility and protection for the workforce, fostering a more dynamic and resilient labour market in Oman.
System of Complaints and Grievances
Ministry of Labour Decision no 617/2024, effective from 21 October 2024, mandates that employers with fifty or more employees establish a formal system to address employee concerns. This system allows employees to challenge decisions made against them by submitting a complaint to their line manager, who must respond within two working days. If the response is unsatisfactory or absent, the employee can escalate the complaint to the employer, who must respond within five working days. Should the employer's response also be unsatisfactory or absent, the employee has the right to submit a complaint to the Ministry of Labour. This system aims to encourage resolution within the workplace while preserving the employee's right to approach the Ministry directly.
Penalties Regulation for Private Sector Employees
Ministry of Labour Decision no 618/2024, also effective from 21 October 2024, requires employers with twenty-five or more employees to prepare a list of penalties and the conditions for imposing them, in accordance with a standard form attached to the decision. The form outlines various penalties, including written warnings, deprivation of periodic increments or allowances, salary deductions (up to five days in one month), suspension from work (up to five days per violation), and dismissal with or without gratuity. Employers may add other types of violations and penalties not included in the form, provided they are approved by the Ministry of Labour. The penalties listed represent the maximum for each offence, allowing employers the discretion to impose less severe penalties.
Guidance Form for Work Regulations
Ministry of Labour Decision no 619/2024, effective from 21 October 2024, provides comprehensive guidelines for work regulations in private sector companies. It covers key labour elements such as recruitment, employment contracts, training and education, wages, periodic increments and allowances, overtime, performance reports, promotions, secondments, working days and hours, attendance rules, inspections, leaves, health and safety, and the rights and obligations of both employees and employers. Employers can adopt this guidance form if it aligns with the nature of their operations or introduce a custom work regulation compliant with Oman Labour Law and approved by the Ministry of Labour.
Temporary Transfer of Non-Omani Employees
Ministry of Labour Decision no 730/2024, effective from 16 December 2024, regulates the temporary transfer of non-Omani employees within private sector establishments. This decision addresses a previously unregulated issue, allowing non-Omani employees to temporarily join another establishment within the private sector under certain conditions. These conditions include the profession not being subject to Omanization, the transfer being in the same field as the original profession, the duration not exceeding six months in one year, and the employee's approval. This decision has been welcomed for offering greater flexibility and mobility within the labour force.
Future Developments
In 2025, the Ministry of Labour is expected to issue further decisions on various aspects of the labour market. These include regulations on casual, temporary, part-time, and remote work, as well as the establishment of a special committee to consider redundancy applications submitted by private sector establishments. These anticipated changes aim to provide a more adaptable and secure labour environment, ensuring that Oman remains responsive to the evolving needs of its workforce and economy.
For comprehensive guidance and assistance with any inquiries regarding Oman Labour Law and its regulations and their impact on your business operations, please contact us.
Abdul Mutalib Al AjmiTrainee Lawyer
The legal landscape in Oman has undergone significant transformations in 2024, aligning with the strategic framework of Oman Vision 2040. These changes span various sectors, including education, banking, governance, media, and legal advocacy. As we look ahead to 2025, several new laws are anticipated to further shape the legal environment in Oman. Key areas of focus include electronic transactions, public health, and financial regulations. This article delves into the major legal developments of 2024 and provides a glimpse into the legislative changes expected in 2025.
Education and Training Sector
In 2024, two royal decrees brought substantial changes to the education and training sector. The first decree transferred the responsibilities of vocational training from the Ministry of Higher Education, Research, and Innovation to the Ministry of Labor. This shift aims to streamline vocational training and better align it with labor market needs. The second decree granted Sultan Qaboos University financial, administrative, and academic independence, enhancing its ability to operate autonomously and innovate in higher education.
These upcoming changes are poised to further modernize and enhance the legal framework in Oman, continuing the momentum of 2024's significant legal developments.
Banking Sector
The Deposit Protection Law was a landmark development in the banking sector. This law established the Deposit Insurance Fund for conventional licensed institutions and the Takaful Deposit Protection Fund for Islamic licensed institutions. These funds are designed to protect depositors' funds, enhance confidence in the banking sector, reduce systemic risks, and promote financial stability. The law ensures that depositors can recover part or all of their funds in the event of a bank's insolvency or liquidation within the limits defined by the law.
Governance
Several royal decrees were issued to improve governance in Oman. The National Records Law was introduced, creating a comprehensive database managed by the National Records Centre. This database includes data generated or held by government entities, state-owned companies, and entities granted concessions or licenses by the state. The law mandates these entities to provide the National Records Centre with relevant data, including processed information.
Biometric Data Law
The Biometric Data Law was enacted to regulate the use of genetic fingerprinting (DNA testing). The law prohibits the use of genetic fingerprinting to establish or deny paternity, specifying its use only in cases such as suspected identity mismatches in hospitals or identifying unclaimed bodies.
Commercial Companies Sector
The establishment of the Financial Services Authority marked a significant development in the commercial companies sector. This authority is responsible for overseeing, regulating, and supervising the financial sector, including capital markets, insurance companies, commodity and energy markets, derivatives, and credit rating agencies. It also regulates the accounting and auditing profession.
Legal Sector
The Law on Advocacy and Legal Consultancy introduced major reforms to the legal profession. Key changes include restricting lawyers from practicing law alongside any other employment and banning them from owning or investing in private businesses, except for public joint-stock companies. The law also allows lawyers from Arab or foreign countries to represent clients in Omani courts in specific cases, provided they collaborate with an Omani lawyer, adhere to the principle of reciprocity, and obtain permission. Additionally, the law mandates that individuals or companies hire a lawyer to file lawsuits exceeding 10,000 Omani Rials. It also stipulates a two-year waiting period for individuals who have previously worked in judicial or public prosecution roles before they can practice law.
Media Sector
The Media Law, enacted in November 2024, provides a comprehensive framework for media regulation in Oman. The law guarantees freedom of opinion and expression through media outlets and the right of individuals to engage in media activities while prohibiting prior censorship. It outlines the licensing requirements for practicing media activities, defines the rights and responsibilities of media professionals, and regulates the right to reply and correction. Additionally, the law organizes activities related to publications.
Looking Ahead to 2025
As we move into 2025, several new laws are expected to be reviewed and potentially enacted. These include the Electronic Transactions Law, the Public Health Law, and the Financial Law. Additionally, regulatory bylaws for existing laws, such as the Advocacy and Legal Consultancy Law and the Labor Law, are anticipated. These upcoming changes are poised to further modernize and enhance the legal framework in Oman, continuing the momentum of 2024's significant legal developments.
Conclusion
The year 2024 has been a pivotal one for legal reforms in Oman, with substantial changes across various sectors. As we look forward to 2025, the anticipated new laws and regulatory bylaws promise to build on this progress, further aligning Oman's legal landscape with the goals of Oman Vision 2040.
Afaf Al Riyami Trainee Lawyer
In 2025, Oman is set to introduce the Real Estate Regulation Law, a significant legislative development that aligns with the Oman 2040 Vision and the Oman National Spatial Strategy. This initiative, which has been under consideration by the Shura Council for the past year, aims to address the current gaps in the legal framework governing the real estate sector. The Ministry of Housing and Urban Planning has been at the forefront of this effort, recognizing the need for laws and regulations that keep pace with the sector's rapid growth. This new law is expected to have a positive impact on related sectors such as construction and tourism, ensuring the proper administration of all related activities and the protection of all stakeholders involved.
Current Legal Framework in Oman
Presently, the real estate sector in Oman is governed by a variety of laws and regulations, including the Real Estate Registry Law, the Apartments and Levels Ownership Law, and laws related to GCC citizens' ownership in Oman and ownership in Integrated Tourism Complexes (“ITCs”). Additionally, there are rules governing Real Estate Investment Funds' ownership of properties and ministerial decisions on the controls of companies' ownership of properties for business activities. Despite this comprehensive legal landscape, several gaps and challenges persist, particularly in areas such as establishing homeowners' associations in ITCs, real estate development projects, and real estate valuation. Ambiguities surrounding ownership rights and their transfer, especially in real estate development projects, and issues related to foreign ownership rights, have led to inconsistencies and regulatory overlaps.
These challenges underscore the need for a unified and consistent legal framework to protect the rights of all stakeholders and maintain a consistent position in real estate transactions and projects.
Key Expected Features of the Anticipated Law
While no official announcements have been made regarding the draft law, discussions suggest that the Real Estate Regulation Law will update and unify existing laws, addressing current challenges and ambiguities. The law is expected to provide a clearer structure for conditions related to ownership transfer, fees and taxes, and procedures for registering real estate ownership. It will likely clarify foreign ownership rights in ITCs and beyond, and establish property management practices under the supervision of a relevant authority, including any necessary licensing and registration requirements. The law may also take into account the population and services of each governorate.
For real estate developments and usufruct, the law could highlight ownership of project lands, obligations, and requirements, with standardized rules to protect buyers from project delays or cancellations. This would safeguard both parties in such transactions. Additionally, there is a direction to encourage the use of eco-friendly and renewable energy materials in real estate projects, which could be reflected in the law. The anticipated law may introduce standard provisions, with further regulations providing more specific and detailed provisions for all real estate-related transactions and activities. It will be interesting to see if the law or its executive regulations will facilitate easy and quick transactions between stakeholders, such as quick title transfers.
The proposed law is expected to offer several advantages, including increased investor confidence and transparency among all stakeholders, a favorable impact on real estate values, and changes in stakeholders' behavior.
Expected Outcomes
The proposed law is expected to offer several advantages, including increased investor confidence and transparency among all stakeholders, a favorable impact on real estate values, and changes in stakeholders' behavior. It could also introduce avenues for increased accountability in real estate development projects, preserving the current level of foreign investment activity in the real estate sector. However, several factors need to be considered when the law is implemented, including the potential administrative and financial load on stakeholders.
The anticipated Real Estate Regulation Law represents a significant step forward for Oman, aiming to streamline the real estate sector and its development. It is crucial that the law balances the interests of all stakeholders, creating a transparent and dynamic environment that continues to encourage sector growth and contribute to economic development across all demographics.
