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Expatriate Employments in the Private Sector in the Sultanate of Oman

Guiding Principle

The countries of the Gulf Cooperation Council (GCC) have been pursuing nationalization initiatives aimed at gradually reducing, and eventually eliminating, their dependence on foreign labour. Private sector businesses in the Sultanate currently employ some 1.488 million workers, of which Omanis account for a mere 14.6 per cent. A recent change in the way Oman will go about the business of injecting more nationals into the workforce suggests that the government aims to boost the number of Omanis in couple of vital private sectors.

A.  The Omani Labour Law

I.    General information on the Employment Law of Oman

The Omani Constitution guarantees Omani nationals the right to work, prohibits compulsory labour (except for the performance of public services for a fair wage), prohibits discrimination between citizens and generally addresses all relevant employment issues. In the beginning of this year the Omani government asked its departments to propose rules on issuing new permits for recruiting foreign workers, and to assess which sectors should be the focus of efforts to employ Omani nationals. This reflects current trend for Omanisation, the policy aimed at reducing the reliance on foreign workforce in the private-sector employers.

The Omani Labour Law (Royal Decree 35/03) governs labour and employment-related issues and applies to both Omani and expatriate employments in the private sector. In addition to the Constitution and the Law, Ministerial Decisions issued by the Ministry of Manpower (Ministry of Labour) and the Social Insurance Law also apply to the private sector workforce. Both the constitution and the Labour Law provide for employment of Omanis to the maximum possible extent and thus take precedence. Hence for employing a foreigner, the employer must obtain prior labour clearance from the Ministry of Manpower which is subject to conditions:

  • qualified Omanis are not sufficiently available for the relevant post;
  • and the employer has achieved the minimum Omanisation percentage specified for its sector.

II.  Employment Contracts under Omani Labour Law

In Oman, as in other countries, employment contracts are typically entered into for an indefinite duration. Although, in certain situations the definite-term contracts can be an alternative worth considering while employing foreign workforce in the Sultanate. The Omani Labour Law allows for employment contracts to be for a fixed rather than unlimited duration, and explicitly provides that fixed-term contracts shall be effective, stating “The contract of work shall terminate [upon] … the expiry of its period or completion of the work agreed upon.” Especially in case of the termination, the fixed-term employment contracts tend to be more beneficial for an employer than those signed for unlimited duration. The Omani courts, in turn, are generally very respectful of fixed-term employment contracts. While the courts often hear unfair dismissal cases brought by employees whose contract of indefinite duration was terminated, the courts are unlikely to countenance unfair dismissal claims by employees who were asked to leave the company upon the expiration of their fixed-term contracts. Although the Omani Labour Law in general favours employees, its respect for fixed-term arrangements is one of the areas where the law is protective of employers.

However they can be used in a variety of circumstances, fixed-term contracts are naturally most useful for hiring employees that will be working on a single, discrete project with a well-defined time frame.

Fixed-term contracts may also be especially useful to foreign companies that only plan to operate in Oman for a limited period of time. By lowering the risk of unfair dismissal claims, fixed-term contracts could help to protect against overhanging liabilities that could interfere with the company’s plans to smoothly conclude its affairs in the Sultanate.

There are subtle but important nuances to the Omani Labour Law, such as the requirement that a fixed-term employment relationship must be severed at the expiration of its term, lest a continuing relationship be deemed by the Labour Law to constitute a renewal of the employment contract for an indefinite period.

B.  Expatriate Employments in the Sultanate of Oman

I.    Employment Visa

In general, foreign natural persons must obtain a visa to enter and must obtain a permit to reside in the Sultanate. Visas for some nationalities are granted upon arrival. Others must obtain visas in advance. Local sponsorship is required for employment, family-joining and short-term visit visas. Local employers must obtain labour clearance from the Ministry of Manpower before employing a foreign employee. Based on labour clearance, an employment visa is granted to employees to enter Oman. Applications for visas for an employee’s spouse and children must be routed through the employer for sponsorship.

II.  Conditions prior obtaining Labour Permit for a Foreign Employee

Foreign employees must satisfy certain conditions:

  • must be professionally competent with requisite qualifications for the post;
  • must comply with Foreigners Residence Law (Royal Decree 16/95);
  • must be medically fit;
  • must have a contract with employer who has licence to do business; and
  •  must have a work permit.

Sector-wise, long-term Omanisation targets were introduced by a series of Ministerial Decisions in 2003. These are regarded as mandatory, and exceeding the target percentage entitles employers to preferential treatment in expediting the process of getting labour permits for other foreign employees and in other dealings with Government authorities.

III. Process of obtaining Labour Permits for Foreign Employees in the Sultanate

As stated above, foreign nationals who wish to work in Oman need an employment visa:

  • It is granted at the request of a local sponsor and on his responsibility to the foreigner coming to Oman for employment and whose age is not below 21 years old. The hiring company shall appoint a local sponsor to assist with the employment visa application.
  • The sponsor must be a local citizen with a full legal capacity, who will become responsible for the truth of the information given in the application forms while obtaining labour clearence permit.
  • Job offer/ employment letter proposal from a company duly registered in the Sultanate.
  • A letter of invitation from the hiring company, and a signed work permit issued by the Omani Directorate General of Labour Affairs will be submitted by the sponsor on the employee’s behalf.
  • The person shall be of the same sex as stated in the labour permit, which was beforehand issued by the Directorate General of Labour Affairs.
  • The occupation for which the visa is requested must be identical to the one stated in the labour permit.
  • Validity of the employment visa- within three months from the date of issuance, for two years, valid for extension and multiple entries.

In cases of transferring the sponsorship within the Sultanate, a release letter from the former sponsor and approved by the Directorate General of Labour is required. All violations, including the delay fine must have been settled while the new visa application is being submitted.

Some nationalities or categories of employees need special permits, such as: Filipino housemaids, who need labour permit from the Filipino Embassy and attested by Oman’s Ministry of Foreign Affairs prior to the application. Irrespectively, the nationals of the following countries are also required to submit a medical clearance certificate: Bangladesh, Egypt, Ethiopia, India, Indonesia, Pakistan, the Philippines, Sri Lanka, and Sudan. These certificates must be endorsed by the Omani Ministry of Health.

Omani public authorities are becoming increasingly strict about the employment of foreign nationals, and that require significant skills and employment experience to be assured of being granted an employment visa. In some cases, the authorities will need to be convinced that the position could not adequately be filled by an Omani citizen, furthermore if visa application is denied; the applicant is not entitled to an explanation from the consular authorities.

July, 2013 Catherine Jaskiewicz
Meyer-Reumann & Partners, Muscat Office
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