Tuesday, July 21, 2020

Oman Abolishes the No-Objection Certificate

The Sultanate has announced its decision to abolish the No-Objection Certificate (“NOC”) for expat workers who wish to transfer their services to different sponsors upon the termination of their services with existing sponsors. The decision to cancel NOCs will be enforced from the start of 2021 with the aim of making the labour market more attractive and competitive, as well as correcting its conditions.

The cancellation of the NOC is largely due to the Sultanate’s accession to the International Covenant on Social, Economic and Cultural Rights, which the Sultanate agreed to join on 7 April 2020 in accordance with Royal Decree 46/2020 issued by his Majesty Sultan Haitham Bin Tarik.

Article (6) of the Covenant states that countries that are party to the Covenant shall recognise “the right to work,” which reserves to every individual a right to earn a living by practicing a work of his/her choice or accept it freely. The same article requires signatories of the Covenant to take necessary action to guarantee this right.

Article (7) of the Covenant states that the signatory countries that are party to the Covenant shall recognise the right of every individual to enjoy fair and satisfactory terms of employment.

The decision of the Royal Oman Police (ROP) amended some provisions of the Executive Regulations of the Foreigners Residence Law, issued by Royal Decree 40/15. Article (1) replaces the text of Article (24) of the Executive Regulations. The repealed article stated that an expatriate employee shall not be granted an employment visa if he or she has worked in Oman but has not completed two years from the date of his or her last departure; the employee can return to the same employer anytime within two years or he can join a new company, provided there is a NOC from the last employer. The new article states that “expatriate resident visas may be transferred from one employer to another who has a license to recruit workers, provided the evidence of the expiry of contract or termination of the employment contract is presented with proof.” There should be an approval of the competent government authority on the second employer’s contract with the expatriate, per the rules. The transfer of residence permits belonging to the expat’s family members to the new employer will be allowed.

It is hoped that this decision will achieve many positives for business owners, including the adoption of the principle of labour contracts that will regulate contractual relations between employers and workers in a manner that guarantees the rights and duties of both parties. Also, such contracts will provide an aspect of protection for employers in terms of keeping the confidentiality of their data with them, and to ensure that there is no competition if the employer wishes to leave.

One of the main advantages of implementing this decision is to enhance the competitiveness of the Omani workforce.  In addition, the decision will result in reducing costs and administrative burdens resulting from deportation procedures and the settlement of legal status.

It is expected that this decision will support the Sultanate’s efforts to combat black market trade, as it will reduce the ability of some employers to exploit the issuing of NOCs. Also, this decision will result in a local market for talents that enjoys the dynamics of supply and demand.

A grace period has been provided for the application of this decision extending until the beginning of 2021. As for the rights to confidentiality of the information the worker accesses during the contracting period, the law allows employers to conclude non-disclosure agreements to preserve confidential information even after the worker has moved to work with another employer. With regard to the possibilities of the worker moving to a direct competitor, employers may conclude a non-competition agreement to ensure that the worker does not move to a direct competitor after the end of the contractual period between them.