Question

Mr. Ahmed Mohammed an expatriate joined as a doctor in one of the leading hospitals in Oman on 22^nd June 2017. As per the labor contract he is entitled for a basic salary of RO. 800 plus other allowances. His gross starting salary is worked out RO. 1250. On 4^th April 2020, he submitted his resignation with sufficient notice period complaining against the employer not providing the safety and security equipment as he is given duty in the Covid 19 department of the hospital. Mr. Ahmed Mohammed asked the company to pay him his service benefits including gratuity for the period of his service. Company refused to pa3y him gratuity saying that the employee did not complete the tenure of the agreement.

1) Is he entitled for gratuity? If yes, calculate the amount of gratuity and the Article in the Labor Law which guarantees retirement benefits under such circumstances.

2)If not, give reason and the Article NO. In the Labor Laws which prohibits payment of service benefits under certain circumstances.

Answer 1

Article 39 of the Labor Law (Royal Decree 35 of 2003) states that expatriate employees are generally entitled to an end-of-service gratuity payment

on the termination of their employment contract and provides the calculation for the gratuity. The gratuity is calculated as follows:

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.

In this case, Mr.Ahmed Mohammed , an expatriate joined on 22/06/2017

Resignation Subimtted on 04/04/2020

Notice Period=30 days

Last working date=05/05/2020

As his contract is unlimited contract, he is required to give sufficient notice period(30days) unless it is agreed in the contract for a longer period

Duration of work

1049 days

(2 years ,10 months 15 days)

RO

Basic Salary

800

Other Allowance

450

1250

Daily salary

26.30

(800X12/365)

15 days salary

394.5

(15X26.3)

First two years

789.041

Remaining days

344.800

(13.1*26.3)

Total Gratuity

1133.841

10 months 15 days(319 days)

13.1

(15/365)X319 days

The gratuities are calculated based on the final basic salary, and any fraction of a full year is paid on a pro rata basis.