Issues of unemployment and job layoffs in Oman.

Unemployment and job loss are persistent and recurrent issues globally, particularly in the absence of a social system that provides adequate support to those affected by such challenges. Oman is one of the countries where there is no social system in place that offers protection to the unemployed or those who have lost their jobs. Oman has historically witnessed numerous protests and demonstrations, driven primarily by unemployment and demands for jobs and improved living conditions. In July 2023, the current Sultan of Oman issued Royal Decree No. 52/2023, enacting the Social Protection Law. This law has been met with both widespread acceptance and controversy due to its provisions, which include offering assistance and support to the unemployed and those who have been laid off, whether due to the termination of their services or contracts or due to the closure of their employer’s business.

According to a statement by a government official, more than 300,000 workers were laid off between 2021 and 2022, including 7,500 Omanis. The official attributed the layoffs to the COVID-19 pandemic. However, to this day, many Omanis, as well as migrant workers from other nationalities, continue to face job terminations. The authorities have attempted to introduce limited measures to mitigate the negative impact, but these measures fall short of the expectations of many who have been laid off. Despite the official’s assertion that the private sector will experience significant economic growth, contributing to the development of various economic sectors and increasing the gross domestic product, thereby making it an attractive sector for Omani job seekers, the issue of layoffs, along with unemployment, continues to escalate.

Additionally, and more importantly, contrary to the official’s statements, a study published in 2022 identified multiple reasons for job layoffs, with the COVID-19 pandemic being one contributing factor but not the sole cause. The study found that the primary reason for layoffs was the lack of available contracts between the employer and the employee. It also noted other factors such as retirement age, work-related accidents resulting in physical injury, company policies aimed at reducing workforce size, the replacement of jobs with modern technology, and insufficient wages for workers.

Despite the fact that the authorities in Oman provide financial support to social security families—those without any working members, either parents or children—as well as to low-income families whose monthly income does not exceed a certain threshold, the authorities do not offer any significant assistance concerning housing or energy expenses, such as electricity, gas, or even water. According to 2023 statistics, the total population in Oman exceeds 5 million, based on official figures. It is also important to note the existence of the social housing system and its associated housing programs, which are designated for low-income families, social security families, and other eligible groups.

According to the Social Protection Law, Article 6 identifies the benefit for first-time job seekers (unemployed individuals) as one of the branches of social benefits. Additionally, Article 7 refers to employment security as one of the branches of social insurance. The Social Protection Fund outlines that employment security is a scheme designed to provide temporary income relief to those who have lost their jobs due to circumstances beyond their control. The program is mandated to cover all Omani workers in Oman, including those with permanent or temporary contracts, training contracts, and even retirees who are still employed. For Omani workers outside of Oman, participation in the program is optional. 

In the past July, the employment security benefit was extended from 6 months to 12 months, with the benefit amount to be gradually reduced every 4 months. Those who have been laid off view this as a disregard for their social situation, particularly for those with financial obligations towards their families.

With the recent increase in the number of layoffs and job losses, by the end of June 2024, the unemployment rate had risen to 3.6%. It is noteworthy that Oman has experienced demonstrations and protests by both unemployed and laid-off workers in various years, the most recent being in May 2021. During that protest, demonstrators called for job creation, addressed issues related to layoffs, and demanded legislation to prevent companies from exploiting workers. They also advocated for the enforcement of laws and regulations to hold companies accountable and prevent them from evading punishment.

The OCHRD calls for urgent action to address the unemployment issue in Oman, advocating for the implementation of a comprehensive program that covers various aspects such as housing, energy, and stipends until the unemployed secure either temporary or permanent employment. The program should also include necessary support in cases of low wages. It is worth noting that the authorities in Oman have set a minimum wage of no less than 325 Omani Riyals, approximately $845. Additionally, those who have been laid off have frequently faced age-related challenges, where they are often rejected or denied new employment opportunities due to their age.

Furthermore, the OCHRD urges consideration of the circumstances of those who have been laid off, in a manner that better aligns with their previous financial situations before job loss, particularly those who are suffering from the repercussions of unemployment, such as accumulating debts and social responsibilities. It is worth mentioning that in cases of financial difficulty or job loss, victims face demands from banks to repay loans, as insurance does not cover loan payments in such scenarios