Gratuity as per Oman Labor Law

We are receiving numerous inquiry where in our kababayans are asking about Gratuity particularly on how it is computed.

We have tried to scout and dig deep in the internet to find a comprehensive and easy to understand information about end of service benefits, unfortunately, there are none.

So what we are going to provide in this article are information taken from the Oman Labor Law.

Article 39 of the Oman Labor Law states that:

On the termination of the relation of work of the workers who are not beneficiaries of thee Social Insurance Law the employer shall by the worker a post service gratuity in the amount of the wage of fifteen days for each year of service for the first three years, and the wage of one month for each of the following years. The worker shall be entitled to the gratuity for a fraction of the year proportionate to the period of his service and the last basic wage of the worker shall be considered the basis for the calculation of the gratuity.

The continuous period of service, which commenced prior to the enforcement of this law shall be included in the period of service which is considered for determining the period for which of gratuity is payable. The said gratuity shall not be payable if the duration of service is less than one year.

To put this in illustration, it will be:

Length of employment: 1 to 3 years
Gratuity: 15 days basic salary for each year of service

Length of employment: 3 years or more
Gratuity: 1 month basic salary for each year of service

The gratuities are calculated based on the final basic salary, and any fraction of a full year is paid on a pro rata basis. No end of service benefit applies to employees who have been employed for less than a year.

If the employer establishes and operates a separate fund scheme approved by the government, then the expatriate employee may be entitled to receive the higher of the amounts payable under Article 39 or the separate fund payments, but not both.

The above information is not applicable to those who works as Domestic Workers. Sultanate of Oman through the Ministry of Manpower has an existing Labor law, unfortunately, in Chapter Two of the said Labor Law – General and Transitional Provisions, Article (2) item number 3 states that – “Domestic servants working inside houses or outside houses such as a driver, maid and a cook and those with similar jobs.”