Employing foreigners in Mozambique – recent constraints August 2016

By ARMANDINHO MUNHEMEZE CAULA, Published in International - Mozambique

The discovery of natural resources, and the expected development of the country, have led to a number of national and foreign companies beginning to develop various businesses in Mozambique. The short-term employment framework appears to be the most flexible mechanism available to them because it allows the use of qualified, specialised staff in projects taking place around the country.

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The short-term foreign contracting regime is established in Article 12 et seq of the Regulation on Procedures and Mechanisms for Hiring Foreign Citizens approved by Decree No. 55/2008 of 30 December. The same regime is also regulated in Article 12 et seq of Decree No. 63/2011, of 7 December, which approves the Regulation on Hiring Foreign Citizens in the Petroleum and Mining Sectors, and paragraph 2 of article 20 of Decree-Law No. 2/2014, of 2 December, which establishes the special legal and contractual arrangements applicable to the Liquefied Natural Gas Project in Areas 1 and 4 of the Rovuma Basin.

According to paragraph 1 of Article 12 of Decree No 55/2008, short-term employment is that which does not exceed thirty days, consecutively or interspersed, and which is undertaken by foreign nationals even if they are contracted by the company's headquarters or representative offices in another country. Thus, in general, short-term work under this Decree lasts for 30 days. Exceptionally, where justified reasons exist, this period may be extended but the extension may not exceed 90 days within the same calendar year. Authorisation of an extension is the responsibility of the entity that oversees the areas of labour, employment and social security in each province. This means that second and third short-term working periods, valid for 30 days each, require authorisation.

However, in accordance with Article 12 of Decree No. 63/2011, short-term employment in the petroleum and mining sector undertaken by a foreign national must not exceed 180 days, consecutive or not, in the same calendar year. This is even when the foreign national is contracted by the holding company, concessionaire, operator, subcontractor or its representative offices in another country. Under this Decree, therefore, short-term work is for 180 days and cannot be extended.

Under paragraph 4 of Article 12 in conjunction with Article 7, all of Decree No 55/2008, the short-term work permit should be issued immediately upon the request submission. Paragraph 2 of Article 12 of Decree No. 63/2011 goes further by indicating that short-time work does not require a work authorisation, merely a communication that it is taking place. This means that the company simply has a duty to inform the labour authorities that it has a foreign citizen working on a short-term basis, indicating for how long the employee will remain with the company.

However, Circular No. 001/MITRAB DTM/GD/211/2013 of 15 April, issued by the National Labor Immigration Directorate of Employment and Social Security, instructs all Provincial Labor Departments in the country to comply with paragraph 6 of Article 3 of Decree No. 63/2011, which states that the short-term work regime is only available when hiring foreign nationals to carry out unforeseen or urgent work. In the same Circular, the National Labor Immigration Directorate requires Provincial Directorates to assess the relevance of the communications received from companies about short-time working prior to issuing approvals.

In our view, this Circular withdrew the legal prerogative for companies merely to report to the labour authorities when they employ foreign nationals on a short-term basis. It should be noted that a Circular is lower than a Decree in the hierarchy of legal sources.

As a result, a number of constraints have been imposed on companies that hire foreign nationals on a short-term basis.

  • Short term work is always subject to approval by the labour authorities

Contrary to the law, short-term work is now always subject to authorisation by the labour authorities, regardless of whether it is the first short-term work permit or an extension. In the petroleum and mining sectors, as already mentioned, the law states that an authorisation is not required for short-term work, mere communication is sufficient.

  • Frequent rejections

Recently there have been a number of rejections of short-term work processes, allegedly because the work that will be carried out by the foreign national does not meet the requirement of being unforeseen or urgent. Note that only Decree No. 63/2011 requires that short-term work be unforeseen or urgent. This Decree regulates the hiring of foreign nationals in the petroleum and mining sector only and should not be extended to cover companies operating in other sectors. It is a legal principle that lex specialis derrogat lex generalis, that is, the special law derogates the general law. However, it is our understanding that a special law cannot be used to regulate matters contained in the general law. When drafting Decree No. 55/2008, the legislator intended that all work could fall within the short-term framework, as long as it does not exceed thirty days, whether consecutive or not. Here we draw attention to the principle ubi lex non distinguir, nec nos distinguere debemus, namely that if the law does not distinguish, it is not for the interpreter to distinguish.

  • Delays in responding to short-term work communications

The length of time taken by the labour authorities to assess short-term work communications is excessive and contra legem because, in accordance with the law, the first short-term work authorisation should be issued immediately on submission of the application. The labour authorities take on average 10-days to give an opinion, which is excessive for types of work which are urgent or unforeseen.

  • Short-term authorisations for visits

In addition to the foregoing constraints, there is a grey area around the relevance or otherwise of including directors, administrators, representatives or shareholders who live abroad and visit the country to see their investments, within the short-term work framework. In our view, a short-term work authorisation is not required in these instances for the following reasons:

  • These directors, administrators, representatives or shareholders are not technical experts;
  • They visit the country to develop contacts and relationships with local staff and contractors;
  • They have to visit the local business because they are, or represent, investors.

We believe it is impractical for shareholders who live abroad to request authorisation from the labour authorities in order to visit their own companies periodically or whenever they deem necessary.

Senior people have visited various countries and have invited businesses there to come to Mozambique and invest. One would expect the labour authorities to understand the underlying objective behind the creation of the short-term work framework, and to make efforts to complete procedures expeditiously and with a sense of responsibility.

The lack of understanding of and reaction to the constraints by the labour authorities may discourage entrepreneurship and delay the country's development, thereby thwarting foreign investment in Mozambique.

Caula is a consultant with SAL & Caldeira Advogados, Lda (a member of DLA Piper Africa).