Ministry of Labour mandates strict adherence to end of service payout guidelines

Muscat: The Ministry of Labour has urged business owners to strictly follow the legal guidelines regarding end-of-service payouts for employees excluded from the Social Protection Law.According to an official directive on post-employment entitlements, management must disburse all required compensation immediately upon the conclusion of a worker's contract in compliance with statutory labour requirements. Key Calculation Criteria(i) Contracts under the Previous Labour LawFor agreements executed prior to the recent legal updates, severance is determined using a tiered structure:• Years 1 to 3: Equivalent to 15 days of pay per full year worked.• Year 4 onwards: Equivalent to 30 days of pay for every additional completed year.(ii) Contracts under the New Labour Law (Royal Decree No. 53/2023)For staff hired under the updated legislative framework, payouts must equal a minimum of one full basic salary for every year of completed service.Calculation BaseAll end-of-service benefits must be computed using the employee's final drawn basic monthly salary.