Arbitrary Dismissal of the Worker and Its Legal Effects under the Omani Labor Law No. (53/2023)

Arbitrary Dismissal Under Omani Labor Law No. 53/2023 Explained

1. Permeable

Jurisprudence and the judiciary have consistently established that labor law is the general law governing labor relations between all parties. This is because the State, as the sovereign authority and the protector of workers, does not leave the matter entirely to employers; rather, it intervenes in labor issues, workers’ interests, and employment. The State establishes labor welfare offices, inspects workplaces, and monitors the application of the law. State agencies also ratify companies’ internal regulations. Thus, labor law serves a social and public interest of the community, unlike private law, which serves an individual interest.

In Omani Labor Law, arbitrary dismissal is considered a sensitive issue in which the legal system protects the worker’s rights from any unjust termination of the employment relationship. The Omani Labor Law No. (53/2023) and its related regulations clearly address this matter. Below is an overview of the subject:

2. Definition of Arbitrary Dismissal

Arbitrary dismissal is the termination of the employment relationship by the employer without a legitimate legal reason, or for reasons contrary to the law, such as discrimination or retaliation against the worker for exercising his legal rights.

3.  Arbitrary Dismissal of the Worker and Its Legal Effects

The Omani Labor Law regulates the right of each party to an employment contract to terminate the employment relationship. Article (38) of the Labor Law states: “Either party to an employment contract – with respect to contracts of unlimited period – may terminate it at any time after its conclusion, based on a legitimate reason, by giving the other party written notice prior to termination: thirty (30) days for monthly paid workers, and fifteen (15) days for others, unless the contract stipulates a longer period.

If the contract is terminated without observing the notice period, the party terminating it shall compensate the other with an amount equal to the notice period or the remaining portion thereof, calculated on the basis of the last comprehensive wage received by the worker.”

Legally, it is not sufficient for the termination to be lawful merely by observing the notice period. Omani courts have ruled that termination must also be justified; otherwise, it is considered an abuse of the right to terminate the employment relationship and thus arbitrary dismissal.

4. Cases in Which the Employer May Dismiss the Worker Without Prior Notice

Article (40) of the Labor Law provides that the employer may dismiss the worker without prior notice and without an end-of-service gratuity in the following cases:

1. If the worker assumes a false identity or resorts to forgery to obtain employment.
2. If the worker commits a mistake that causes serious material loss to the employer, provided that the employer reports the incident to the competent authority within thirty (30) working days from becoming aware of it.
3. If the worker fails to comply with written safety instructions necessary for the safety of workers and the workplace despite a written warning, and such violation could cause serious harm.
4. If the worker is absent without an acceptable excuse for more than seven (7) consecutive days or ten (10) non-consecutive days in a year, provided that dismissal is preceded by a written warning after five (5) days of absence in the second case.
5. If the worker divulges company secrets unlawfully.
6. If the worker is convicted by a final judgment of a felony or a crime involving dishonor or dishonesty, or of a misdemeanor committed at the workplace or during the performance of work.
7. If the worker is found during working hours intoxicated, under the influence of drugs or psychotropics substances, or commits indecent acts.
8. If the worker assaults the employer, his representative, a superior, or another worker at the workplace, resulting in illness or incapacity for work.
9. If the worker commits a serious breach of his contractual obligation to perform his agreed work.

5. Compensation for Arbitrary Dismissal under the Labor Law

According to Article (11) of the Labor Law, if the competent court finds that the dismissal was arbitrary or unlawful, it must rule either for reinstating the worker or for obligating the employer to pay compensation of no less than three (3) months’ wages and no more than twelve (12) months’ wages, calculated on the basis of the worker’s last comprehensive wage, taking into account the worker’s circumstances and length of service. This is in addition to:

1. The end-of-service gratuity legally due, and all other benefits stipulated by law or the employment contract, whichever is greater.
2. The comprehensive wage for the notice period prescribed by law or the contract, whichever is greater.
3. The social insurance contributions due from the date of arbitrary dismissal until the issuance of the final judgment.

From the text of Article (11), it is clear that the Omani legislator left no doubt regarding what the employer is obligated to pay the worker if the dismissal is proven arbitrary.

6.  Cases Explicitly Considered Arbitrary Dismissal by Law

Article (12) of the Labor Law provides that termination by the employer shall be deemed arbitrary dismissal in the following cases:

1. Termination based on gender, origin, color, language, religion, belief, social status, disability, pregnancy, childbirth, or breastfeeding (in the case of a female worker).
2. Termination due to the worker’s membership in a trade union, his lawful participation in its activities, or his representation in union-related matters as prescribed by law.
3. Termination due to filing a complaint, report, or lawsuit against the employer, unless the complaint or lawsuit was malicious.
4. Termination for disciplinary reasons without complying with the provisions of the Labor Law, workplace regulations, or the penalties system of the company.
5. Termination due to the worker’s absence resulting from detention or imprisonment by the competent authorities, if the detention period expires without referral to court or if the court declares the worker innocent.

7.  Worker’s Rights in Cases of Arbitrary Dismissal

If arbitrary dismissal is proven, the worker is entitled under Omani Labor Law to:

• Claim financial compensation for arbitrary dismissal. The court determines the amount based on the harm suffered, length of service, and reasons for dismissal. The compensation shall not be less than three (3) months’ wages and not exceed twelve (12) months’ wages, calculated on the basis of the last comprehensive wage.
• Receive all outstanding entitlements, such as unpaid wages, end-of-service gratuity, and accrued annual leave.
• Demand reinstatement to work, if practically feasible.

8. Legal Procedures for the Worker

If a worker is subjected to arbitrary dismissal, he may take the following legal steps:

1. File a complaint with the Ministry of Labor, which will investigate the complaint and mediate between the worker and the employer.
2. File a lawsuit before the labor court division if the dispute is not resolved amicably at the at the Welfare Department, Ministry of Labor.
3. Prove arbitrary dismissal by presenting evidence showing that the dismissal was not legally justified, using all legally permissible means of proof.

Conclusion

We pray to Almighty God that this effort and work be sincerely for His sake, and may God benefit everyone through this study and its application. Indeed, He is All-Hearing, Responsive.

Prepared by: Dr. Mohammed Gharbawi
Al-Alawi & Co – Lawyers and Legal Consultants
Muscat, Sultanate of Oman