How Oman’s Labour Law protects employees during business transfer

Law provides protections for employees when a business is transferred, ensuring their employment rights remain intact. The law safeguards workers from losing their legally prescribed rights and entitlements due to changes in ownership or structure. 

In an exclusive interview with Times of Oman, Dr. Mohammed Ibrahim Al Zadjali, Founding Partner of Mohammed Ibrahim Law Firm, a leading law office in Oman, explains that “when an establishment is sold, merged, assigned, leased, or otherwise transferred, the employment contract remains in effect except in cases of liquidation, bankruptcy or authorized complete closure. 

The successor employer becomes jointly liable with the previous employer for all legally prescribed obligations, protecting workers entitlements such as wages, seniority, and end-of-service benefits.” Dr. Mohammed further stated that “the new employer must retain Omani employees engaged in the transferred project under the same wages, financial benefits, and incentives agreed upon in the transfer agreement."

 
This helps prevent any reduction in employment terms due to the change in ownership. 

It also guarantees continuity not only of employment but also of the financial conditions that workers had previously enjoyed.

“Additionally, workers wages and entitlements are granted priority over other debts, ensuring they are paid before other creditors. 
If the employer fails to meet these obligations, workers may seek redress through the Ministry of Labour and the competent authorities to claim and enforce their legally prescribed rights,” Dr. Mohammed noted. 

“This legal framework guarantees that employees do not lose their hard-earned rights simply because their employer changes. 
It reinforces stability and fairness in the labour market during business transitions,” Dr. Mohammed concluded. 

(Mohammed Ibrahim Law Firm ([email protected]), (+968 244 87 600) was established on 14th December 2006 and is serving clients through its offices in Muscat and Sohar, as well as operating on a request basis in other areas.  It offers legal representation across a wide range of practice areas that include Labour Law, Corporate, Commercial, Contracts, Banking and Finance, International Trade, Foreign Investment, Insurance, Maritime Law, Construction and Engineering Contracts, International Arbitration, Intellectual Property and more).