Abdullah Al Nabhani
An employer may have a genuine reason for wanting to terminate an employee. That does not always mean the termination is free from a wrongful dismissal claim.
The reason for the decision matters. So does the evidence behind it. If the dismissal is disciplinary, the process followed also matters.
Article 12 of the Oman Labour Law, issued by Royal Decree 53/2023, identifies five situations in which termination by an employer is treated as arbitrary dismissal.
What Changed Under the 2023 Labour Law?
Arbitrary dismissal is not new to Omani labour law. Under the previous Labour Law, the courts could grant remedies where a dismissal was found to be arbitrary or contrary to law. The previous law also protected employees from dismissal in certain situations.
Article 12 takes a clearer approach. It brings specific grounds together and expressly provides that termination for any of them is arbitrary dismissal. Some of these protections are also wider than under the previous law.
For example, Article 12 expressly covers dismissal because of union membership or lawful union activity. It also covers dismissal because an employee made a complaint, report or claim against the employer, unless it was malicious.
For disciplinary dismissals, the process also matters. A dismissal may be treated as arbitrary if the employer does not follow the Labour Law, applicable work regulations or the establishment's penalties regulation.
When Is a Dismissal Considered Wrongful in Oman?
Under Article 12 of the Oman Labour Law, an employer's termination of an employment contract is treated as arbitrary dismissal if it is based on any of five specified grounds.
Discrimination
A dismissal is treated as arbitrary if it is based on the employee's sex, origin, colour, language, religion, creed, social status or disability.
For female employees, this also includes dismissal because of pregnancy, childbirth or breastfeeding.
Trade Union Membership or Activity
Article 12 protects employees from dismissal because of trade union membership, lawful participation in union activities or representation in trade union work.
This does not mean that a union member cannot be dismissed for a separate lawful reason. The question is whether the union membership or activity was the reason for the dismissal.
This issue arose under the previous Labour Law in a dispute involving an employee of an oil and gas company. The employee claimed that he had been dismissed because of his union activity. The employer relied on work and conduct issues which it said had started before the employee joined the union.
The dispute reached the Oman Supreme Court in Labour Appeals 558/2016 and 619/2016. The case shows why the actual reason for dismissal can become important where union activity is involved.
Complaints or Claims Against the Employer
A dismissal is also treated as arbitrary if the employee is dismissed because they made a complaint or report, or brought a claim against the employer. This does not apply where the complaint, report or claim was malicious.
Making a complaint does not prevent an employee from later being dismissed for a separate lawful reason. The question is whether the complaint was itself the reason for the dismissal.
For example, an employee may have a documented history of performance problems and later make a complaint against a manager. The complaint does not remove those earlier performance issues.
The position may be more difficult where there were no recorded performance concerns before the complaint, but concerns are raised shortly afterwards and followed by dismissal. Neither situation decides the outcome by itself, but the employment record, timing and evidence may become important if the reason for dismissal is disputed.
Failure to Follow the Disciplinary Process
Article 12 treats a disciplinary dismissal as arbitrary if the employer does not follow the Labour Law, applicable work regulations or the establishment's penalties regulation.
This is important where misconduct is alleged. The reason for dismissal and the disciplinary process are separate issues, and both may become relevant if the dismissal is challenged.
Article 63 also contains requirements concerning informing the employee of the allegations, hearing the employee's response and recording the process in writing. Articles 64 and 66 contain further rules on disciplinary action and workplace investigations.
Detention or Imprisonment
Article 12 also covers the circumstances stated in the law where an employee is absent because of detention or imprisonment and is not referred to court after the detention or imprisonment ends, or is found innocent by the court.
The previous Labour Law also protected an employee from termination in certain cases following detention. The 2023 Labour Law now expressly treats termination on this ground, in the circumstances stated in Article 12, as arbitrary dismissal.
What Should Employers Consider Before Termination?
Before terminating an employee in Oman, an employer should consider the reason for termination, the evidence supporting it, the timing of the decision and, for disciplinary dismissals, whether the required process has been followed.
The reason. The employer should be clear about the actual reason for termination and the legal basis being relied upon.
The evidence. Performance records, warnings, correspondence and investigation documents may become important if the reason for dismissal is later disputed.
The timing. A recent complaint, union activity, pregnancy or another situation covered by Article 12 does not automatically prevent termination. But the timing may raise a question about the real reason for the decision.
The procedure. For disciplinary dismissal, the employer should consider the Labour Law, applicable work regulations and the establishment's penalties regulation.
The point is not to create documents simply to support a decision that has already been made. The company's records should reflect what actually happened and the genuine reason for the termination.
How Does Article 12 Relate to Dismissal for Serious Misconduct?
Article 40 of the Labour Law deals separately with circumstances in which an employer may dismiss an employee without notice and without end-of-service gratuity, including certain cases of serious misconduct.
Article 12 addresses a different issue. In particular, Article 12(4) makes compliance with the disciplinary requirements relevant where the dismissal is disciplinary.
We discuss the Article 40 grounds separately in Dismissal Without Notice in Oman: Article 40.
How Long Does an Employee Have to Challenge a Dismissal?
Under Article 10 of the Labour Law, an employee who does not accept the employer's decision to terminate the employment contract may submit a complaint to the competent authority within 30 days from the date of notification of the decision.
The law provides for an attempt to settle the dispute before it proceeds to court.
What Happens If the Court Finds the Dismissal Wrongful?
Article 11 deals with the remedies where the competent court finds that a dismissal was arbitrary or contrary to the Labour Law.
The remedies may include reinstatement or compensation, together with other entitlements provided by law.
The amount of compensation is a separate issue from whether the dismissal was wrongful. We discuss this separately in Compensation for Wrongful Termination under Omani Labor Law.
Redundancy and termination for economic reasons are also governed by separate provisions and are considered in our Redundancy Termination in Oman: A Guide for Employers.
A Practical Point for Employers
Article 12 does not mean that an employee who has made a complaint, joined a union or falls within another category mentioned in the Article can never be dismissed.
The key issue is why the employment was terminated.
Where the employer relies on a separate reason, the employment history and evidence may become important in showing when and why that reason arose. For disciplinary dismissals, the process followed also matters.
For employers, this means the reason, evidence and process should be considered together before a termination decision is made, particularly where Article 12 may be relevant.
Bait Al Qanoon advises employers on workplace investigations, disciplinary matters, termination decisions and employment disputes under Omani law.