By Sarah Townsend
Fund could cover up to 60% of private sector employees’ salaries for six months after losing job
Private sector companies in Oman are in talks to create a shared ‘redundancy fund’ for staff that lose their jobs, according to local media.
The chairman of the General Federation of Trade Unions in Oman is believed to have met with officials from the Public Authority of Social Insurance, to discuss setting up a security fund for private sector employees that are made redundant.
Oman is battling to close a steep budget deficit this year as the low oil price and instable economic conditions in the region hit national revenues. Analysts predict the private sector could be hit hard, with many forced to rationalise workforces.
Under the plans for a so-called redundancy fund, eligible staff could receive up to 60 percent of their salaries for six months after losing their jobs.
Nabhan Al Battashi, chairman of the trade union federation, was quoted in Times of Oman as saying: “Employees registered under the social security records losing their jobs due to cost-cutting or non-renewal of contract upon its completion, could be financed 60 percent of their salary for six months from the fund, from the day they go jobless.”
He added: “The proposal to pay 60 percent of the salary is not fixed; it depends on the investment level of the fund in the future. It could be more or less than 60 percent of the employee salary.”
Al Battashi explained that Oman’s labour law protects private sector employees to a point, but if they are made redundant on expiry of a particular contract they were working on, for example, they may not be eligible to receive compensation.
“Such funds exist everywhere in the world and it’s time to implement it in the Sultanate now,” Al Battashi said.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.