Union legislation: Positive Pressure
The government’s decision allowing the formation of labour unions strikes the perfect balance between protection of workers rights and safeguarding the interest of employers writes Visvas Paul D Karra

The amendment to the labour law allowing the formation of trade unions in the Sultanate is being hailed as a radical step in the right direction both as a catalyst for the sound economic development as well as signaling Oman’s openness to integrate and align itself with the global marketplace. The amendment to Chapter 9 (employee representative committees) of the labour law for Omani private sector was introduced by the government with the promulgation of Royal Decree 74/2006 in July 2006 allowing union rights for the first time.

In line with this royal decree, Ministerial Decisions 294/2006, 17/2007 and 24/2007 were issued as accompanying regulations prescribing the rules, procedures for formation and functions of the unions. Effectively, this gives private sector employees the right to strike; the right to establish labour unions and a General Federation of Workers; and the right to engage in collective bargaining and peaceful negotiations for the purpose of reaching a collective agreement in relation to the issues which affect employees.

According to Ministerial Decision 294/2006 (as amended by Ministerial Decision 17/2007), the purpose of collective negotiations is to promote dialogue and discussions between the employer and the employees or unions to improve work conditions, productivity and settle work related disputes.

The labour law amendment also protects employees who are union representatives from dismissal or penalties for practicing union activities and employers cannot punish members because of their union membership. There are three tiers of unions which can be formed in Oman. The first of course is the labour union, which should comprise a minimum of 25 employees in a company. The second tier, is the sector union – a collective group of labour unions from the same sector of activity or industry to represent that sector. The top tier is the General Federation of Workers which will comprise of all labour and sector unions in Oman and will oversee the lower tiers.

There are also no restrictions on who may join a union and a person of any nationality regardless of the duration of employment can become a union member. Notwithstanding the reservations expressed in some quarters over the long term ramifications of the union rights, till date more than 40 labour unions have been approved and registered with the ministry of manpower indicating sweeping changes in the landscape of labour relations in Oman.

A harmonious balance
A General Federation of Oman Trade Unions is also in place. Besides this, there is a mediation committee with representatives of trade unions and employers is in the pipeline. Generally, managements see red when you mention the word union because they perceive them to be like the proverbial Damocles’ sword perennially hanging over their head.

Bitter experiences in other countries where trade union strikes have struck crucial blows on bottomlines of companies raised similar concerns. But in Oman, it is apparent that the labour law is different in many ways. Chiefly, it has created a comfort zone for the employers as well. Says Gorvinder Pannu, Labour Law Specialist at Trowers and Hamlins: “The union legislation gives new rights to employees, however I don’t believe the legislation is one sided in favour of the employees only.” The legislation favours employers in some respects, i.e. the requirement on part of the employees to give three weeks notice of a strike action to be given to the employer.

This gives an employer the opportunity to resolve a dispute. Indeed, if an employer requests conciliation, then a strike cannot proceed. Pannu also underlined the fact that collective agreements for a minimum term means that both parties (employees and employers) have reached an agreement on an issue and that issue cannot be re-opened during the term of the agreement unless both parties agree. Employers also have the right to lock up the work place and if the employees go on a strike, the employer is not obliged to pay them wages for the number of strike days.

The laws governing labour unions and their rights gives an insight into the intentions of the government to tread a middle path by crafting the norms around the sensibilities of a peace loving socio-economic fabric of the culture which Oman is renowned for. This sentiment is echoed by Essam Al Sheibany, Secretary General of General Federation of Oman Trade Unions who says that union activities in their neighbouring countries like Egypt and Bahrain were not so pleasant. According to Sheibany, Oman has been a peace loving country all throughout history and traditionally any tribal dispute was sorted out through conciliation rather than confrontation.

Building blocks
“A number of companies did have employee representation since a long time. But as a union federation, we want to use the power given by the law for collective bargaining and peaceful negotiations. We are not looking for conflict with any management,” declared Sheibany who works with Oman Refineries Company for Petrochemicals. Continuing further Sheibany said: “We know of European managers in some companies who expressed their displeasure over the formation of unions but we want employers to understand that their companies will benefit by way of productivity and reduced rate of attrition when they have employees who have job satisfaction.”

Concurring with this, Nasser Khalfan Al Rahbi, senior manager, government institutional corporate banking division of National Bank of Oman (NBO), who is heading the NBO Staff Labour Union says: “Organisations should realise that a labour union is a partner in achieving common objectives like organisational growth and prosperity. This will result in greater job satisfaction and lead to higher productivity and profitability of the organisation. We think that this is the way forward for a win-win situation.” (Also see box).

Sources in the ministry of manpower also agree with this opinion while saying that a union is a kind of an image builder for a company or organisation. If there is a union in a company, a worker would feel safe. This holds true for new comers also. Both Sheibany and the ministry of manpower source, who wished not to be named, cited the example of the tourism industry with reference to the workers’ union at Grand Hyatt Hotel as a perfect case where a union exerts positive pressure on the management.

The Grand Hyatt Hotel workers union had a peaceful negotiation with the management for a salary revision, both for entry level employees as well for the existing staff. After the negotiations, the hotel’s management revised the salaries and now there is a whole bunch of satisfied employees in Grand Hyatt and the steady stream of job hoppers has also trickled down.

Managements are being encouraged to take cue from this and support the formation of unions. Sheibany sums up the objective of the unions in Oman when he says that they (unions) have a role to play in achieving the economic, social and educational goals of the employees. This will hopefully give rise to a new class of employees who will contribute as nation builders.

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