Oman moves to revoke NOC from next year

Muscat: The Sultanate is moving towards abolishing the No-objection Certificate (NOC) which stipulated employer’s written consent for the transfer of workers under their sponsorship to another employer, with effect from January 2021. The move is aimed at addressing the situation of the labour market and boosting its competitiveness and attractiveness.

The decision stems from the economic and social principles stated by the Basic Statute of the State as the Sultanate joined the International Covenant on Economic, Social and Cultural Rights on April 7 this year as per the Royal Decree No 46/2020.

It is hoped that the decision will have several advantages for the employers including the adoption of labour contract principle which regulates the contractual relational between employers and workers in a manner that ensures the rights and duties of both parties. Besides, the labour contracts protects the rights of employers in terms of protecting the confidentiality of their information and the information of the parties dealing with them.

Among the prominent advantages of the decision to rescind the NOC is that it will boost competitiveness of the Omani workers relative to non-Omani workers by bridging the income and rights gap. In addition, it will significantly reduce abscondment cases of non-Omani workers particularly workers coming under pressure from employers clinching to their rights of non-issuance of an NOC thus depriving workers from being employed within a period of two years following their termination. Other advantages include reducing the cost and administrative burden resulting from the deportation and legal settlements.

The decision is expected to back the government’s efforts to fight hidden trade as some employers will no longer be able to benefit from the conditions associated with the NOC which allowed them to practise hidden trade. In addition, the decision will open the local market for skilled workers subject to the supply and demand dynamisms and will back the Sultanate’s stance vis-à-vis international organizations as a country that protects worker’s right to free movement and fights human trafficking.

The implementation of the decision is expected to initiate a new phase of relationship between employers and workers based on the laws and legislations governing employment and residency in the Sultanate. It will highlight the essential role of the labour contract which ensures the rights of both parties and their obligations towards one banother beside being the sole reference in case of any dispute based on the legal principle which states that the contract is the document that governs the legality of the relationship as both parties can include any terms that may preserve their rights and determines their obligations.
The relevant authorities have given employers until the beginning of 2021 to adjust their situations by signing labour contracts with non-Omani workers. Additionally, the authorities are seeking to draft a labour contract to serve as a reference for employers with the possibility of including any terms that the parties involved see as protective of their rights and obligations.

The relevant bodies have put into consideration some factors that might be of interest for the employers including allowing them a grace period until the beginning of 2021. As regarding the right of confidentiality of information that are revealed to the workers during the contractual period, the legal practises allows the employers to sign Non-Disclosure Agreements (NDA) with their employees which aims at maintaining the confidentiality of information of employers particularly after worker’s transfer to another employer.

As regarding the potential of worker’s transfer to a direct competitor, the employer may sign a non-competitive agreement to ensure that their workers are not permitted to transfer to a direct rival following the expiry of the labour contract.

One of the Sultanate’s priorities is making a headway at the major international indexes in order for the country to be placed among the world’s advanced nations by the year 2040. The enforcement of the NOC has had a negative impact in terms of various global indicators including the Global Competitiveness Report (GCR) published by the World Economic Forum (WEF) which concluded that the labour market legislations have had a negative impact on the ease of doing business in the Sultanate.

The Sultanate’s ratification of the International Covenant on Economic, Social and Cultural Rights was the major pillar in the abolishment of the NOC as His Majesty Sultan Haitham bin Tarik issued a Royal Decree in April this year approving the Sultanate’s joining the international convention.
Article (6) of the Covenant recognizes the right to work as defined by the opportunity of everyone to gain a means of sustenance by means of freely chosen or accepted work, while article (7) recognises the right of everyone to just and favourable working conditions. — ONA