The Ministry of Labour (Mol) in Oman has issued clarifications regarding end-of-service gratuity as outlined in Article 61 of the Labour Law. This law applies to workers who are not covered by the Social Protection Law and have had their employment contracts terminated. The provision states that upon termination, employers must pay workers a gratuity equivalent to not less than the basic wage for each year of service. The gratuity is calculated based on the last basic wage of the worker and includes fractions of the year proportional to the period of service.
The Ministry explains that the period of service includes the time worked before the enactment of the law. In cases where the entitlement arose under the previous law and continued under the new one, the gratuity is calculated at different rates depending on the number of years served. For the first three years, the rate is fifteen days’ wages per year, while subsequent years are calculated at one month’s wages per year. If the entitlement arises solely under the new law, the gratuity amount must be at least one basic salary for each year of service.
To illustrate the calculation method, an example is provided for a worker whose employment started before the new law and continued after its enactment. The example demonstrates how the gratuity is calculated based on the basic salary and the periods of service before and after the new law came into effect. It is important to note that the specific provisions of the Social Protection Law may also impact the gratuity calculation for certain workers.
For accurate and personalized advice on end-of-service gratuity calculations in Oman, it is recommended to consult with HR professionals or legal experts who are well-versed in the Labour Law. These experts can provide guidance on how to accurately calculate gratuity amounts based on individual employment circumstances and ensure compliance with the relevant laws and regulations. By following the guidelines outlined by the Ministry of Labour and seeking expert advice when needed, both employers and workers can ensure fair and transparent calculations of end-of-service gratuity in accordance with the law.
