The employment law landscape in Oman has been transformed with the new Labour Law promulgated by Royal Decree 53/2023 (Labour Law). The Labour Law introduces important new provisions that regulate the procedure for termination, aimed at ensuring an equitable process for both employer and employee.

This article explores the grounds under which employers are permitted to terminate an employment contract with notice under the Labour Law. It is of a general nature only and is not a substitute for specific legal advice.

• Retirement age: Under the old law, the retirement age was set at 60 years. However, the Labour Law links retirement age to the Social Protection Law. This might mean a requirement for employers to keep track of the applicable retirement age under the Social Protection Law and also potentially extends the working years for some individuals.
• Omanisation: Employers can now terminate an employment contract if they wish to comply with their Omanisation obligations, as they are permitted to replace an expatriate employee with an Omani citizen. This provision underscores the government's commitment to increasing employment rates among Omani nationals.
• Poor performance: The concept of termination for poor performance has been introduced for the first time in the Labour Law. This provision allows employers to terminate an employment contract for poor performance, provided that the employee is given notice and a minimum of six months to improve their performance. This is...

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