Y Investigation: The NOC issue hangs by a thread in Oman

17 Aug 2017
POSTED BY Alvin Thomas

SMEs are locked in the continuing controversy of the NOC. Bosses cite being left out of pocket as expat staff deal with threats, intimidation and unpaid wages. Alvin Thomas and Hasan al Lawati investigate how the ruling affects Oman’s businesses while keeping a tight rein on its workers.

When Jagdish Menon* joined an engineering firm as a sales executive in 2016, he was elated. His dream of starting his career and settling down in the Sultanate had finally come to pass.

The Muscat-based expatriate’s first few weeks at work were “challenging” but “blissful”. He even managed to extend his company’s portfolio beyond the capabilities of his senior colleagues.

It was – in his words – a “walk in the park”.

However, as time went by, and as the oil crisis began bearing down on the market, his sales results began to drop. Soon, with no warning, his company – citing “delays in funding” – decided to stop paying salaries to their employees.

And by the beginning of this month (August), Jagdish was owed three months in unpaid wages. With no other means to sustain himself or his family, which includes his wife and two young children, he questioned the management about the dues.

But he did not get his salary. Instead, he was fired from his job, and was denied a No-objection certificate (NOC) that would have enabled him to continue living and working in Oman.

Desperate for an NOC, he contacted his managing director.

To that, his words were: “You weren’t committed enough in your job to work without a salary. The other employees are all doing that and you should have, too.

“If that’s the case, why should I give you an NOC, then?” he asked Jagdish.

Since its introduction in July 2014, the two-year visa ban has sparked controversy among the expatriate community in Oman.

The NOC is a letter granted by an employer to expatriates who want to move from one job to another at the end of their contract. It also bans expatriate employees from entering the country for a period of two-years.

According to Y’s sources at the Ministry of Manpower and Royal Oman Police (ROP), numerous complaints of “mistreatment” and “wrongful termination” have been come up in the courts of Oman.

And over the past three years, several reports – some suggesting the scrapping and “relaxation” of the law –had made waves in local media.

The longstanding law has not seen any change, as yet.

But, today, several small-and medium-sized enterprises/business (SME) owners are calling for the law to remain in place to protect Omani businesses, and in effect “uplift the Omani economy”.

To get to grips with the worries and concerns raised by SMEs in Oman, we talk to Redha Juma Mohammed Ali al Saleh, the vice-chairman at the Oman Chamber of Commerce and Industry (OCCI).

“We support the NOC,” he says.

“We believe it is vital to stay because it is not acceptable for an employee to leave a job to join a competitor.

“Plus, finding a suitable substitute takes a long time, which affects a company’s work process,” Mr al Saleh adds.

Haitham al Zadjali, the owner of a web-designing and information technology company in the capital concurs.

“Why should I incur a loss for bringing in an expatriate from another country, pay for his visas, invest in his training and take up his losses if he has made any?” Haitham asks.

“It’s unfair, you should understand. I want to see the NOC stay in place.

“People think that it is easy to just hire an employee, here. That’s not the case. We have to run – sometimes on our own – to the ministries to get the approvals. Also, it costs RO301, for hiring one person,” he exclaims.

In November, last year, the Ministry of Manpower (MoM) increased visa fees for expatriate workers by 50 per cent. This meant sponsors are now paying RO301, as opposed to the previous RO201, from previous years.

“What people fail to understand is that we who run SMEs are mostly running on loans that we took up from the government and our relatives. We have to pay them back.

“I have a huge debt with the bank, and it isn’t going to clear itself.

He reveals that he is operating on a debt of RO80,000, that he must clear in the coming nine years.

“Of course, my priority is to pay my employees. When I am the owner of a business, I am not only responsible for myself and my family; I am responsible for the people who work for me, and their families, too,” he says, after hearing Jagdish’s story.

Haitham’s company – an eight-man team – is predominantly run by expat designers and an engineer, hailing from India and Pakistan.

Another SME owner, Saeed al Farsi, who runs his own diary factory, in Oman says that the NOC-rule has to stay.

“I invest a lot when hiring an expatriate. I train them, pay for health insurance and for travelling tickets. The absence of such a law will put any business owner in a financially difficult position.

“I do not think it is fair,”  Mr al Farsi exclaims.

But, he then points out that a similar rule should be implemented on the Omani workforce.

“The new generations [employees] do not stay at one place and they want to work less for a higher pay. It has been difficult for me to hire Omani drivers as they do not stay.

“Earlier, people had more dedication and were more committed to their jobs. I used to work for years with minimum wage without jumping from a company to another,” he explains.

After a quick research, we learn that the minimum wage for a driver – or any Omani – in the private industry is RO325. In retrospect, an expat driver can earn anywhere between RO100 and RO250.

Haitham tells us that he opted for expat designers due to the “lack of experienced Omanis” in the field.

“I can get an Omani designer, but he will most likely be a fresh graduate. But, I pay my designers RO300 and I train them on a yearly basis. This, of course, means that my company is stable.

“I cannot afford to let them work for a competitor,” he explains.

But, much like Saeed al Farsi, Haitham also reveals that he would hire Omanis if the MoM were to implement an NOC-rule for Omanis.

“I don’t mind training Omanis for the job. The only concern I have is if they will stay. The general trend is for them to jump ship after a few months of work for a better opportunity.

“I recently lost my public-relations officer when he got offered a job with a better pay with a private organisation, in Al Amerat,” he adds.

The NOC-rule, however, is not only supported by Omanis.

John Joseph, an Indian expat, who co-owns a medium-scale engineering firm that operates in the petroleum industry in Oman, says: “The NOC may be a bane for the employees, here. But, given the market that we operate in, it is a blessing.

“My words may come across as insensitive. But I’m a businessman, and I have to take care of my company.

“You see, if one of my skilled engineers were to leave my company with a release and an NOC, then he will most likely join one of my competitors. That will completely put my company on the back foot.

“He or she will most likely leak out sensitive company information, too.

“In a market like that of Dubai, there are hundreds of players in one industry so switching jobs will not affect as much as it will here.

“In Oman, we only have 12 direct players in the industry that I operate in. And if my staff were to move over to one of them, the chances of it affecting me are higher.”

John also points out that the NOC-rule, coupled with the difficulty of securing visas for expats has led to the employment of more Omanis. He boasts an Omanisation rate of 32 per cent.

But has this law really benefited Omanisation?

According to the government’s latest figures (released in 2016), more than 1,824,282 expatriate workers currently reside in Oman.

The Omanisation rate in the private sector is roughly 12 per cent, according to statistics revealed by the National Centre of Statistics and Information (NCSI).

Moreover, the expat employment grew by 9.3 per cent in 2016, as opposed to a rise of 6.4 per cent in the hiring of Omani workforce, in the private sector.

“An increase is an increase,” says Jameel al Bulushi, the owner of a chain of restaurants, in Muscat and Al Amerat; commenting on the increase in Omanis in private sector jobs.

“I don’t understand why we’re making a big fuss about the NOC. I have not felt the pinch to keep my staff from leaving. If someone wants to leave, let them.

“I would like ask business owners here one question: do you think an unhappy employee will give you 100 per cent of their effort?”

“If money is an issue, deduct the visa fees from their salary for one month, and let them leave. The NOC-rule is against their well-being. I’ve heard countless cases of companies using employees – it’s horrible,” he exclaims.

“Are we all such heartless people?” he asks.

Jameel believes that the key to solving the NOC issue is to let employees make a decision after they have completed a contract with their employer.

“After two years, an employee most likely will want to switch jobs. I know that because I was an employee for 20 years. I cannot keep count of the number of jobs I switched to during that period of time,” he says.

This idea is also shared by the assistant general manager and head of SME business at Ahli Bank, Azzan Al Saleh. He says: “An expat employee should be allowed to decide where he or she wants to work after finishing a two-year contract.

“I think the NOC-law should be eased in in a way that an employee can move freely upon finishing a contract.

He adds that business owners should work on keeping their staff through ‘incentives’.

“It is only fair to include both Omanis and expatriates under a unified law because employers do hesitate to employ Omanis due to the immunity they have by the law,” al Saleh explains.

“This will eventually boost Omanisation and ensure the expat labour force a freedom of movement,” he adds.

Extending his support to employees in Oman is Abdul Rahman al Adawi, the owner of a small gaming arcade.

“The rule does not harm all SMEs. It depends on the enterprise.

“To me, I would never stop a staff member from joining another company.

“But for other establishments; a restaurant, for example, losing a cook to a competitor can be harmful to the business,” he says.

Still, expatriates are afraid there is no one to listen to their woes.

Agreeing to speak to Y, on condition of anonymity, is a chef for a top restaurant in Oman.

“I have been meaning to leave my restaurant for months now for a better offer from within Muscat.

“And from the day I put down my papers, the company has been threatening to terminate me without the possibility of an NOC.

“They even slashed my salary by RO120,” he says in a broken tone.

“Thanks to this, my family gets less money every month. Not being able to give them enough money has been haunting me for months now,” he says, before he breaks down.

Expressing his frustration to Y is Oliver J*, an employee of a communications company in Oman.

“There must be some form of a reprieve for employees,” he tells.

“I love this country from the bottom of my heart.

“But, at this point of time, the government is treating employee rights like two sides of a coin… no wait! They’re treating it like one side of a coin. And that’s the side of the employers.”

*Name changed to protect identity


– Partner at law firm Curtis, Mallet-Prevost

Q: Is an employer legally required to provide a no-objection certificate (NOC) after the end of a contract term, such as two years?

A: No, there is no such requirement.

Q: If the employee is not provided with an NOC, can he/she challenge it? If so, can he/she take the employer to court? Is this a difficult/costly process that they risk not winning?

A: No, an employer cannot be compelled to provide an NOC under the law. In ordinary circumstances, any complaint to the courts would almost certainly fail.

Q: Is an employer legally bound to provide an NOC if they let go of an employee due to budget cuts?

A: No, there is no legal requirement to do so. We are not aware of any case where the court, when considering a claim against termination due to redundancy, has ordered that an NOC be granted.

(Interview conducted in 2016)

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