I Would Have Violated the NOC

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Oman labor laws are in the news again. Last year I wrote about Understanding the Omani Labor Market. Scroll down and read the comments, you will see that not everyone agrees with my article. What they do not agree with is that my description of the outcome is not what the law states. My analysis is focused on the economics of the outcome and not on the intent of the law. Economists are trained to analyze the intention of the law and compare it to the actual behavior response to the policies. This comes as surprise to many, people do not behave as you intend them to. The law of unintended consequences is always present.

The recent policy receiving attention in Oman is the No Objection Certificate (NOC). Here is a break down of the policy, the intention, benefits, cots, and my policy recommendation.

The intent of the law

The law is established to protect employers and their investment in the expatriate employee. The law requires that an expatriate employee must complete their contract AND receive a NOC from their employer to obtain a new job in Oman. The premise is the employer has invested in the employee and the NOC will insure that the employer recoups their investment and that the employee is leaving on good terms. Employees transferring jobs before the completion of their contract could hurt the employer.

NOC

Benefits of the NOC

The NOC transfers power to the employer. All benefits of the NOC are geared toward the employer.  The employer does not have to invest in the expatriate employee since the employee does not have the freedom to leave. Leaving the employer means that the expatriate must leave the country and find a job in another country. That’s a high cost to pay for the expatriate.

Costs to the NOC

An Omani in direct competition for the employment/job with expatriate employees will be hurt by the NOC. The NOC makes expatriate workers more desirable, holding all other variables of employment constant. This topic is especially important because it goes against the goal of Omanisation.

Policy Recommendation

Freedom of choice is important here. Allowing expatriates to move as they wish, will allow employers to choose their employees based on an even playing field. If an expatriate is doing well and is being solicited to work for another company, we should allow them to have the choice to leave. Allow labor to flow where labor is most wanted/needed. We should have employers fight over employees. Also by eliminating the NOC we will allow Omani’s to compete with expatriate workers on a more equal footing.

My quality of life would be lower if I had faced the NOC requirement here in the USA. I worked at a university for 3 years. When my market value increased, due to my productivity, other universities started to notice my work.  I was able to move to a place that was a better fit for my work, life, and happiness. I knew I could reach my professional goals.  Had my new university been required to obtain a NOC, I would not have had the chance to leave. My only choice would have been to continue working at an institution that I did not value. Take a moment to think about the impact that has to the quality of the work environment.

The NOC will make the whole country worse off Click To Tweet

Employers, if you want someone to work for you, make your place of work valuable to them. Employee treatment research shows that if the employee feels valued, they are more productive. The NOC will make the whole country worse off.

 

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1 Comment

  1. Well explained from an economist point of view. Firstly,the Omanis should be willing to take up the challenge in the job market instead of taking their employment as a right. Secondly,it must be mentioned that yes,there are many employers who are taking advantage of this rule and not willing to release an expat. In such cases where is the job opening being created for an Omani?
    In my opinion there needs to be an overall revamp of the education system starting at the very primary level. The Omanis I have interacted with and still do, are all willing to learn and work hard to prove themselves.I know you might think that I have interacted with the “creme de la creme” of the society but NO, there have been hundres from the interiors who have come willing to learn but sadly their expectations change the moment they have acquired a degree. An open labour market will definitely benefit the society and the country at large. Like the west where children are taught that a degree does not mean he knows everything about his future job needs to be instilled in the young minds.
    In conclusion, NOC or NO NOC expats will cling on to their jobs..but where the quality of the workforce is concerned.. there will be doubts. I am all for Omanisation but not without fair rules in place.

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