ROP Decision removes NOC requirements for expatriate employees in Oman starting 2021

Oman

The Royal Oman Police has recently announced its decision (ROP Decision 157/2020 Amending some provisions of the Implementing Regulation of the Foreigners' Residence Law (Decision)) to remove the requirement for expatriate employees in the Sultanate to obtain a No Objection Certificate (NOC) from their existing employer, in order switch jobs within Oman. This Decision will be published in the Official Gazette and is set to come into force starting 1 January 2021.

This article provides an overview of the Decision and the likely impact it will have on both employees and employers in Oman.

Pre- Decision NOC requirements

By way of background, Article 24 of the Implementing Regulation of the Foreigners' Residence Law (ROP Decision 63/1996) (Regulations) initially sets out that the approval of the existing sponsor (i.e. the existing employer) in the form of a NOC is required for an expatriate employee to transfer to a new sponsor (a new employer).

Additionally, the new employer must submit a proof of recruitment license which allows them to employ foreigners. The transfer of the expatriate employee’s Residence Permit would result in the direct transfer of the residence of their accompanying family members, to the new employer - provided the necessary requirements of their residence are satisfied.

Essentially, the existing employer shall remain responsible for their employee for the purposes of any matters concerning their residency, unless and until the NOC is obtained. However, if the employee is unable to obtain the NOC, then they will be banned from working with another employer in the Sultanate for a period of two years.

The Decision

Article 1 of the Decision will repeal Article 24 of the Regulations and replaces it with the following:

“It is permissible for a foreigner to transfer from one employer to another, provided the employer has a license to recruit workers, on condition that they provide proof of the end of work contract or termination of it. They must also provide evidence of the approval of the competent government authority on allowing the signed contract with the second employer and it must be in accordance with the controls set by the competent authority.

The transfer of an expat's residency shall result in the transfer of the residence of their family members to the second employer, if the conditions necessary for his residency are met.”

This means that for an expatriate employee to transfer their employment in Oman, they would essentially need to have either terminated or completed the term of their employment contract with their initial employer. Further, even if the expatriate employee is able to obtain proof that their previous employment has ended, ultimately their new employment would be subject to the approval of the competent government authority (i.e. the Ministry of Manpower) regarding the signed employment contract with the new employer. 

The Decision also states that the new employment contract must be “in accordance with the controls set by the competent authority”. Although the Decision does not specify what such ‘controls’ entail, we suspect that this will concern the terms of the employment contract being in accordance with the provisions Omani Labour Law and the new employer satisfying the necessary Omanisation rates specific to their business.

Implications on businesses and employees

This Decision will likely have a positive impact on both employers and employees. Employers will have greater access to hiring expatriate employees with more practical experience in Oman. On the other hand, competition should increase as a result of this Decision. To that end, the bar for employee satisfaction will be set higher as there will be more pressure on employers to satisfy their most skilful employees, in order to retain them and avoid having them poached by competitors.

Conclusion

Save for the requirement to obtain a NOC being removed, the other requirements under the Regulations regarding the expatriate employee’s family members and the responsibility of the existing employer remain the same. 

Although the movement of the labour force within Oman will be made easier in 2021 by the removal of the requirement of NOCs, it is unclear from the Decision how long after the initial employment contract ends, the expatriate employee would have to either find a new job in Oman or leave the country. We anticipate that the role of the competent authority in approving the employment contracts and ensuring that they are in accordance with the ‘necessary controls’, indicates that there will nonetheless be strict regulations in place.