The Coronavirus pandemic currently facing the world has led governments to impose precautionary measures to curb its spread. The Government of the Sultanate of Oman has similarly adopted such measures to curb and contain the virus. However, as is to be expected, these measures have restricted and limited commercial activities, which have had a significant effect on business in Oman.
By following the instructions of the Supreme Committee for Dealing with COVID-19, most companies are now operating with limited numbers of workers on-site or at their premises. This is adversely affecting commercial businesses.
So long as employers do not act in such a way as to intentionally compromise their employee’s wellbeing, employers have the right to organize their business as they deem fit to achieve their business aims. In this perspective, we will discuss the rights of employers to regulate employees’ annual leave entitlements under article (61) of Omani Labor Law.
Since events of force majeure and exceptional circumstances have led employers to reduce workers in their establishments in line with the decisions of the Supreme Committee for Dealing with COVID-19 in order to curb its spread, and since it is jurisprudentially and legally understood that remuneration is paid for work performed, solutions have become limited for employers. From our legal perspective, the first option for the employer is to give workers their paid annual leave until it is exhausted. This is however linked to the financial means of the establishment according to article (61) which states ‘the worker shall be entitled to paid annual leave for a period of thirty days and the worker shall enjoy his leave according to the exigencies of work interest…’. Exigencies of work interest always rest with the employer who determines the same in line with the interests of work. Certainly, the interests of work requires giving workers annual leaves in case of limitation of number of workers in the establishment due to the decline in business or business disruption.
These decisions may not be suitable for certain workers and may be regarded as being contrary to the labor law as a worker has neither had hand in this situation nor refused to perform his work. On the other hand, employers believe that paying workers without performance of any work is unfair and unjust.
With this conflict, legal opinions have emerged. One opinion qualifies the matter as exceptional circumstances giving right to dismissal with compensation, another opinion describes it as an event of force majeure that necessitates termination of contract without compensation for impossibility of performance, while the third opinion brings together both theories, with the application of each theory on a case-by-case basis depending on the effects of coronavirus pandemic on the establishment.
In discussion and deliberation of these three opinions (the decision comes at just the right time). The Supreme Committee for dealing with COVID-19, established under a supreme order, issued its decision dated 15/4/2020 whereby it launched an economic stimulus package to mitigate the effects of precautionary measures against coronavirus and a set of facilities to private companies and establishments, including measures to address the situation in a manner that reconciles between worker’s rights and employer’s rights through government support for these companies and establishments in the form of exemption from, or reduction in fees or extension of procedural deadlines.
The situation was addressed by differentiating between national and foreign workers. For national workers, the decision imposes three obligations on employers, including salary reduction against reduction of working hours for 3 months after the use of leaves.
- It obliges establishments and companies not to terminate national workers.
- It gives them the possibility to grant paid annual leaves.
For foreign workers (expatriates):
- It grants paid annual leaves.
- It allows negotiations with workers to reduce salaries for three months starting from May 2020, if needed (continuous spread of coronavirus).
- It urges affected private firms to deport non-Omani labor force.
The question then arises as to whether the deportation of non-Omani labor force is legal or abusive?
In our humble view, termination here is legal being in line with the decision of the Supreme Committee established under supreme order to address the situation. It also involves some fairness and justice that ensures an equal participation in damages which no party had hands therein.
Authored by Omani Partner, Abdulaziz Alrashdi