Sunday 07 / December / 2025
The Sultanate of Oman is undergoing profound transformations in the structure of its labour market, driven by a clear political will to prepare the economic environment in line with regional and international developments, and to reinforce the foundations of justice and social stability.
At the heart of Oman Vision 2040, employment, human resources, and labor governance stand as strategic priorities for building a diversified and sustainable economy in which people play a central role in development.
Today, the work environment in the Sultanate is not merely a technical framework regulating the relationship between the worker and the employer, but rather a complex landscape where social challenges intersect with the requirements of legislative modernization, particularly given the predominance of expatriate labour in some sectors. This reality brings with it legislative and legal considerations related to equality, protection of rights, and equal opportunities.
At the legal level, Oman has established a relatively advanced framework of laws and regulations, the most prominent of which is the new Labour Law. This law does not merely define minimum wages or regulate contracts, but extends further to enshrine key principles such as the prohibition of all forms of discrimination, the guarantee of equal pay for work of equal value, and the institutional monitoring of working conditions, especially those related to occupational health and safety, night shifts, and temporary employment.
However, practice reveals a gap between the provisions of the law and market realities. Certain groups, particularly expatriate workers and those employed under non-traditional models, still face challenges in obtaining full legal protection.
In contrast, both public and private Omani institutions are making concerted efforts to create a better balance between employment flexibility and job stability. This is being achieved through tools such as social dialogue, collective bargaining, and the integration of mental and physical health principles in the workplace. These efforts reflect a growing awareness of the importance of quality of work, not only its cost.
Equally important is the development of internal reporting and grievance mechanisms within institutions, along with the expansion of the powers of labour inspection departments to move beyond their traditional supervisory role toward a proactive approach that helps prevent disputes and protect vulnerable groups. The outlines of this shift are beginning to emerge in some sectors, though further institutional coordination, capacity-building, and the consolidation of a compliance culture in the workplace remain needed.
Thus, Oman’s work environment today stands at a delicate transitional moment, between ambitious legislation aligned with international standards and real-world challenges that demand innovative, multi-level solutions.
Success in this trajectory will not be measured solely by employment rates, but also by the extent to which decent work is entrenched as a guaranteed right and a key driver of development. Accordingly, this article provides a comprehensive overview of Oman’s labour system, combining three dimensions: observation, challenges, and recommendations.
Justice in the Workplace: Between Protective Texts and Underlying Challenges
In the structure of any modern labour market, occupational justice and the elimination of discrimination in all forms are indispensable pillars for ensuring stable employment relations and sustainable productivity. In the Omani context, the legislator has given clear importance to these two principles in the new version of the Labour Law, where Article (12) explicitly prohibits discrimination in employment, wages, and working conditions, whether based on race, gender, religion, social origin, trade union membership, or opinion.
This legislative commitment to equality is not merely symbolic, but rather responds to essential questions about the fairness of Oman’s employment system, particularly in light of the diversity of its workforce, which includes both national and expatriate employees, permanent and temporary contracts, and fixed or piece-rate wages. Does the principle of “equal pay for work of equal value” apply to all of these groups without discrimination? And is it actually implemented in practice, or does it remain confined to legal texts?
Omani law establishes a solid legal foundation for combating discrimination across three key stages: recruitment, employment, and termination of service. The relevant provisions explicitly prohibit any distinction or preference in access to jobs, criminalize discrimination in granting wages or promotions, and consider termination of service based on race, gender, or opinion as unlawful. The responses to surveys confirm that the legislation covers all essential criteria, including gender, religion, social affiliation, and trade union participation.
However, practical experience shows that translating these principles into reality is not without challenges. A workplace culture is not built solely through legislation, but also requires institutional and social awareness that questions daily practices. It is sufficient, in this regard, to observe some sectors with a high concentration of expatriate labour, such as construction or services, where clear gaps in wages and protection can be seen between workers performing the same tasks. Moreover, some flexible or temporary contract models, although legal, are at times used as a means to reduce benefits and rights, creating implicit inequality within the same workplace.
This challenge becomes even more acute for vulnerable groups such as women, persons with disabilities, and workers in digital platforms, who may face subtle and unspoken forms of discrimination, whether in recruitment, promotion, or task distribution. Hence, there is a pressing need for practical mechanisms that go beyond punitive measures, through empowering regulatory bodies, developing internal grievance systems, and promoting a culture of voluntary compliance with equality and justice.
Oman’s notable achievement in this field lies in its explicit inclusion of these principles in the Labour Law, unlike some countries that continue to treat discrimination as a marginal issue. What the coming stage requires, however, is to ensure that these legal provisions evolve into living practices, where justice is measured not only by the text of the law, but by how it is reflected in the worker’s sense of dignity, freedom, and job security.
Temporary Contracts: Flexibility or Fragility?
Among the most sensitive challenges in regulating employment relations is the issue of temporary contracts, which has long represented a field of tension between the market’s need for flexibility and the worker’s right to job stability. The Omani Labour Law, under Article (34), permits the use of fixed-term contracts even for positions of a permanent nature. This provision opens the door to long-term employment that does not qualify as “permanent” and therefore does not grant the legal and institutional benefits associated with a permanent contract.
This provision is not incidental, but rather reflects an attempt to adapt to a changing economic reality in which institutions, particularly in the private sector, seek to reduce costs and maintain greater administrative flexibility in hiring and termination. However, this legal option granted to employers carries within it numerous challenges, especially when used as a tool to evade long-term contractual obligations or as a means of limiting the legal protections afforded to workers under permanent contracts.
The survey on the labour system clearly shows that the law sets a maximum duration of five years for fixed-term contracts without specifying a limit for renewals. This creates a wide margin for employer discretion, which becomes even broader in the absence of clear restrictions on converting “permanent” tasks into repeatedly renewed temporary contracts. Such practices lead to a precarious employment model in which workers lack a sense of security and stability.
This situation affects not only the individual rights of employees, but also overall productivity, job satisfaction, and institutional loyalty. A worker who does not have assurances of continued employment finds it difficult to invest in developing new skills, contribute to innovation within the organization, or even plan their family and professional life over the long term.
The situation becomes more complex when examining the privileges linked to the type of contract. While the law specifies notice periods and end-of-service benefits for employees under permanent contracts, temporary workers do not always enjoy the same rights, particularly if such terms are not explicitly stated in their contracts. Nevertheless, Article (11) stipulates that if the court determines that the termination of a worker’s employment was arbitrary or unlawful, it must rule either for reinstatement of the worker or for compensation to be paid by the employer. This applies to all workers, whether they are employed under fixed-term or indefinite contracts. Accordingly, a temporary worker whose contract is terminated arbitrarily before its expiry is entitled to the same legal protection, ensuring the principle of “contractual justice” and reinforcing equality of rights among all workers performing work of equal value, regardless of the form of employment.
Despite these challenges, temporary employment remains a necessary mechanism in certain circumstances, particularly in seasonal or inherently time-bound projects. The issue does not lie in the existence of fixed-term contracts themselves, but in the absence of clear controls that prevent their misuse and guarantee a minimum level of rights for workers under such temporary structures. The law partially addresses these cases, as Article (50) of the Labour Law obliges the employer to retain Omani workers who were employed in the same project that has been wholly or partially transferred, while granting them the wages, benefits, and financial incentives agreed upon in the transfer agreement. This provision offers legal protection to temporary workers within the context of temporary projects.
Improving the work environment in Oman requires not only regulating the terms of employment contracts but also redefining the relationship between workers and institutions based on transparency and fairness, where flexibility does not equate to fragility, but serves as a means of achieving balance between economic imperatives and the preservation of work dignity.
“A contract of employment may be concluded for a fixed term or an indefinite term. If the term is fixed, it shall not exceed five (5) years, renewable by agreement between the two parties. In the event of renewal, the renewed period shall be deemed an extension of the original period and shall be added to it in calculating the worker’s total length of service.”
Article 11, Omani Labour Law
“If the competent court determines that the worker’s dismissal was arbitrary or unlawful, it must rule either for reinstating the worker to their position or for obligating the employer to pay the worker compensation of not less than three (3) months’ wages and not exceeding twelve (12) months’ wages, calculated on the basis of the last full salary received, taking into account the worker’s circumstances and length of service. This shall be in addition to the following:
1. The end-of-service gratuity legally due to the worker and all other benefits stipulated by law or the employment contract, whichever is greater.
2. The full salary for the notice period stipulated by law or the employment contract, whichever is greater.
3. The insurance contributions due for the period from the date of the arbitrary dismissal until the issuance of the final judgment.”
Social Protection: From a Safety Net to a Pillar of Economic Stability
In connection with the main theme of this article, the work environment in the Sultanate, it is impossible to discuss a balanced labour system without addressing the importance of a comprehensive social protection framework that safeguards workers’ dignity in the face of market fluctuations, illness, unemployment, and ageing. Oman has begun to witness a growing awareness of this concept, particularly with the issuance of the new Labour Law, which refers to several provisions related to unemployment insurance, healthcare, retirement pensions, and compensation for sick leave.
The survey used to assess the work environment indicates that the Sultanate has a legal framework for unemployment protection through a government-backed insurance scheme that covers a broad range of workers, including those who lose their jobs for reasons beyond their control. This insurance appears to be funded through a mix of public revenues and social security contributions, representing an advanced step toward building a comprehensive protection model that does not focus solely on government employees or formal workers. Instead, it is gradually expanding to include more vulnerable groups, such as those employed under temporary contracts or self-employed individuals.
Regarding healthcare, the legal framework requires institutions to contribute to workers’ healthcare costs, although the degree of contribution varies depending on the nature of the contract and the type of institution. The law also provides a general framework for ensuring access to basic healthcare coverage, funded either by the government or through voluntary contributions under the social security system. This opens the door for broader coverage that extends to dependents and families.
As for retirement pensions, there are clear indicators of a contribution-based pension system funded jointly by both the employee and the institution. The system is governed by well-defined rules that ensure a degree of fairness in the distribution of benefits. Nonetheless, certain challenges persist, particularly in standardizing criteria across various sectors and guaranteeing fair coverage for informal workers.
A noteworthy point is that social protection in the Sultanate remains in a transitional phase, moving from a traditional model that relied primarily on government employment as the main source of stability to a more open model that embraces the private sector, entrepreneurship, and employment flexibility. This transition requires a comprehensive restructuring of the protection system, not only at the legislative level but also in administration, financing, and oversight, to ensure that the expansion of non-permanent employment does not lead to protection gaps that increase the vulnerability of large segments of the workforce.
Hence, the social protection framework in Oman extends beyond the humanitarian dimension to become an essential pillar of economic and social stability. A labour market cannot flourish unless workers feel that their professional future is supported by a safety net that shields them from uncertainties. This sense of security, in turn, enhances productivity, reduces workplace disputes, and fosters a culture of responsibility and commitment within institutions.
Wages: Between the Legal Minimum and Structural Inequality Challenges
Wages represent one of the fundamental issues in assessing the fairness and sustainability of the work environment. Their importance extends beyond being a monetary return for labour, as they serve as a decisive factor in ensuring social stability, enhancing productivity, and fostering employee loyalty. The issue of wages presents a dual challenge, both legislative and structural–economic.
At the legal level, the Labour Law establishes the existence of a minimum wage, a principle clearly stated in the legal framework that links the assessment of the work environment to applicable legislation. The survey confirms that the Sultanate applies a unified legal minimum wage for the national workforce, while wages for expatriate workers are often left to the agreement between the two parties in employment contracts. This opens the door to significant wage disparities, even within the same sector.
This situation poses a real challenge to the principle of equal pay for work of equal value, which is meant to ensure fairness among all workers performing the same or equivalent jobs in terms of effort and qualifications, regardless of nationality, gender, or legal status. However, practical reality shows that this principle often loses its substance due to market conditions, differences in individual bargaining power, and the absence of effective monitoring mechanisms to ensure compliance.
From a public policy perspective, the minimum wage is still not linked to a transparent and periodic mechanism for adjustment that takes into account key indicators such as the cost of living, inflation, productivity levels, and economic growth. Although Article (88) of the Labour Law allows the matter to be referred to the Joint Dialogue Committee, the absence of a defined schedule for regular reviews leaves the minimum wage vulnerable to erosion due to economic fluctuations.
While there is some degree of protection for workers through legal provisions, the level of compliance on the ground varies between sectors, particularly in those characterized by informality or dominated by small and medium enterprises. Such entities often adopt flexible employment arrangements that keep wages at minimum levels without providing accompanying benefits.
It is also important to note that the issue of wages does not concern only the nominal amount paid, but also the “quality of wages,” in terms of timely payment, linkage to incentives, and protection in cases of dismissal or work suspension.
The survey results indicate ambiguity in some sectors regarding the minimum wage or the criteria for determining overtime and night work allowances, underscoring the need for clear and binding legislative reforms. In this regard, the Wage Protection System provides an effective safeguard to ensure that wages are paid regularly and on time, thereby strengthening workers’ rights and contributing to the stability of the work environment.
In conclusion, the issue of wages remains open on several fronts—legislative, economic, and cultural. While the Sultanate has made significant progress in establishing a legal foundation, the greater challenge lies in translating these legal provisions into practical instruments that redefine the relationship between wage and dignity, and achieve the desired balance between investment attractiveness and fair distribution.
Article 88, Omani Labour Law
“The minimum wage shall be determined by a decision issued by the Minister after consultation with the Joint Dialogue Committee representing the parties of production and upon approval by the Council of Ministers.”
Chart (1): Average Wages and Legal Allowance Rates in the Sultanate of Oman under the Labour System
Wage and Allowance Rates:
• 81% – Minimum wage for nationals
• 6% – Overtime allowance for daytime work
• 13% – Allowance for night work and rest days
Training and Qualification Programs: Between Human Capital Development and Labour Market Demands
As the Sultanate of Oman advances toward a knowledge-based and diversified economy, training and vocational qualification programs have ceased to be an institutional luxury. They have become an essential component of the national strategy to align the labour market and direct human resources toward the actual needs of productive sectors. Oman Vision 2040 clearly articulates this direction, yet translating it into comprehensive and effective training policies remains an ongoing process that continues to evolve through multiple stages of evaluation and refinement.
The questions included in the labour system survey reveal a clear focus on the role of qualification programs in reducing unemployment, particularly among youth. Some responses indicate the existence of active national initiatives, including both short and long vocational training programs implemented by government institutions or in partnership with the private sector. These programs often focus on technical skills, entrepreneurship, language proficiency, and computer technologies. However, the real challenge lies in the degree to which these skills align with the nature of available jobs in the market.
What distinguishes the Omani model in this regard is its shift from the concept of “training for the sake of training” to “training leading to employment.” This approach aims to build direct bridges between training institutions and companies through mechanisms such as training linked with employment, or pre-employment qualification contracts. Nonetheless, a notable percentage of graduates remain outside the labour market, reflecting either a gap between supply and demand, or insufficient effectiveness of career guidance and employment centres.
This dimension gains further importance when it concerns vulnerable groups such as persons with disabilities, women jobseekers, and workers in the informal sector. The survey does not clearly indicate whether there are programs specifically tailored for these groups, or whether their particular needs are considered in the design of training content. Nor does it clarify whether there is a system in place to measure the economic and social returns of these programs, a necessary step to ensure their sustainability and effectiveness.
In this context, the Sultanate has launched a National Occupational Standards Strategy aimed at equipping the labour market with qualified Omani professionals who possess skills that match the evolving demands of the economy. Under this initiative, ten sectoral skills units have been licensed, eighty-six occupational standards have been developed, and four occupational maps have been designed. The professional accreditation system has also been implemented through two programs, classification and licensing, resulting in the issuance of more than 4,000 professional classification certificates and 22,000 professional practice licenses. This reflects the state’s commitment to developing an integrated training ecosystem that is closely aligned with market needs.
Beyond the development of occupational standards, Article (21) of the new Labour Law stipulates the establishment of a National Human Resources Development Fund under the Ministry of Labour. This fund is responsible for financing employment, qualification, and empowerment programs for all workers in the private sector. The inclusion of this fund within the legal framework reflects the Sultanate’s strategic direction toward enhancing the efficiency of the national workforce and narrowing the gap between skills and labour market requirements, making it a pivotal step in supporting vocational training and qualification programs.
Working Hours and Overtime: Between Production Demands and Workers’ Rights
Regulating working time is one of the most significant indicators of the quality of the work environment, as it directly affects workers’ physical and mental health, institutional productivity, and the balance between professional and personal life. In the Sultanate of Oman, the Labour Law sets out general guidelines governing working hours, regulating overtime, and mandating corresponding allowances. However, variations in implementation across sectors raise questions about the extent to which institutions adhere to the spirit of the law.
The Omani Labour Law stipulates that the maximum weekly working hours shall be 45 hours, distributed over six days, with no more than nine hours per day. Exceptions are allowed for sectors that require specific operational patterns, such as transport, services, and hospitality. The survey indicates that there is also a maximum limit of 15 overtime hours per week, with employers required to pay an additional allowance of not less than 25 percent of the basic wage for daytime overtime, and 50 percent for night work or work performed on rest days.
Despite the clarity of these standards, practical experience reveals frequent violations, particularly in small enterprises or those relying on unstructured labour. In many cases, workers are required to perform additional hours without proper compensation, or these hours are recorded as regular attendance without distinction between standard and overtime work. Some institutions also circumvent the provisions by using flexible or temporary contracts that do not specify working hours, placing workers in a weak bargaining position.
Furthermore, there does not appear to be a strong institutional culture that regards working time as a protected right. It is often perceived as a flexible element subject to the employer’s needs rather than as a mutual obligation between both parties. This perception negatively affects job satisfaction and weakens employees’ sense of belonging, especially when accompanied by the absence of clear systems for attendance tracking and performance monitoring.
The issue of night work also raises additional concerns. Although the law allows it under certain conditions, it is not always practiced in safe or well-regulated environments from a health and social standpoint. In many cases, there is a lack of periodic assessment of the impact of night work systems on specific groups, such as women or workers in caregiving and transport professions.
Article 21, Omani Labour Law
“A fund shall be established within the Ministry for the Development of National Human Resources. The fund shall be responsible for financing employment, qualification, and empowerment programs and policies for workers in the private sector. The Council of Ministers shall approve the fund’s system, sources of financing, and the rules and procedures governing its operation, following coordination by the Ministry with the relevant authorities.”
Working Hours: Weekly, Daily, Overtime.
An Urgent Priority
The progress achieved by the Sultanate in establishing a legislative framework for labour represents a strategic step toward sustainable and human-centred development. However, the greater challenge lies in translating these legal provisions into daily realities that preserve workers’ dignity and enhance their productivity.
A fair work environment is not measured solely by the existence of strict laws, but by institutions’ ability to foster a culture of compliance, achieve a balance between operational flexibility and social protection, and uphold the principle of equality not only in legal texts but also in wages, promotions, and working conditions.
In light of Oman Vision 2040, current challenges should not be seen as obstacles, but as catalysts for rethinking the social contract within the labour market. What is required today is not only the development of systems, but investment in people, as they are the driving force of change and the cornerstone of productivity. Every worker, whether national or expatriate, must be empowered to serve as an active partner in building a diversified, fair, and sustainable economy.
Envisioning the future of the Omani labour market requires more than institutional reforms, it calls for restoring trust among the parties of production and fostering a culture built on partnership and responsibility rather than imposed compliance. Only then can the country progress from merely protecting workers to empowering them, and from managing labour to unlocking minds and energies.
