Forums For Adjudicating Employment Disputes
With the promulgation of the Settlement of Labour Dispute Law in 2012, the Myanmar government has adopted a conciliatory approach for the resolution of labour disputes. This is an important step forward from the antiquated Trade Disputes Act of 1926, which has been repealed with the enactment of this new law.
Under the new law, labour disputes are required to be placed before a workplace coordination committee for resolution, failing which, the claim or dispute may then go to a Township conciliation body for review. Further, dispute cases may be referred to an arbitration body by the reviewing conciliation body or aggrieved party. If the issue remains unresolved and the parties cannot arrive at an amicable solution at the Township or arbitration body, then the aggrieved party may file an action before the Arbitration Council or the competent court in that jurisdiction. It should be noted that concurrent to the dispute resolution process, the law permits either party to nonetheless approach the relevant court to institute criminal or civil proceedings in regard to the legal rights under labour laws. In such cases, a court, realising that conciliation or arbitration proceedings are ongoing, may exercise its discretion to stay proceedings until the conciliation or arbitration process is complete.
As regards the establishment of specialised courts, as of yet, no separate labour courts have been established in Myanmar. As such, labour actions would be filed with the competent court having jurisdiction in the matter.
The Main Sources Of Employment Law
There is no single umbrella legislation governing employment matters in Myanmar. Labour laws are an amalgamation of different pieces of legislation which regulate various aspects of employment. Employment contracts are covered by the Employment and Skill Development Law 2013, while welfare issues are addressed by the Social Security Law 2012 (SSL), The Workmen’s Compensation Act 1923 and The Leave and Holidays Act 1951. Wages, working conditions, and hours are governed by the Minimum Wages Law 2013, Payment of Wages Law 2016, Factories Act 1951, Occupational Safety and Health Law 2019 and the Shop and Establishment Law 2016. Labour unions and disputes are generally guided by the Labour Disputes Settlement Law 2012 and Labour Organization Law 2011. The Ministry of Labour, Immigration and Population (MLIP) is the primary authority responsible for ensuring minimum standards of employment.
National Law And Employees Working For Foreign Companies
Myanmar employment laws apply equally to all employees working in the country, including those working for foreign owned companies, but may exclude employees transferred or sent to Myanmar under a foreign subsisting employment contract.
National Law And Employees Of National Companies Working In Another Jurisdiction
The Law Relating to Overseas Employment (1999) requires all Myanmar citizens, except seamen and government servants, to register with the Directorate of Labour. If employees are sent to work outside of Myanmar by their employer (for example, for an intra-office scheme), their welfare and employment conditions will continue to be governed by existing Myanmar labour laws, unless the employment contract states otherwise.
Currently, there are no specific laws or regulations related to data protection in Myanmar. However, the Constitution of the Republic of the Union of Myanmar (2008), The Competition Law (2015), and the Law Protecting the Privacy and Security of Citizens (2017) set out provisions for the protection of data privacy and security of communications. In addition, other laws related to various industry sectors protect against the disclosure of confidential information. However, we are not aware of any action that has been taken by the authorities under any of these provisions for breach of privacy or the unauthorised disclosure of confidential information.
Legal Requirements As To The Form Of Agreement
As per Myanmar labour law, once an employee has been appointed, there is a compulsory obligation to have the employment agreement prepared. The employment contract must be signed within 30 days from appointment, except where the employee is on probation or training as a pre-condition to appointment. The law designates a list of mandatory provisions that must be included in the contract. Since 2015, the MLIP has required all employers in Myanmar to use an official employment contract form for their employment agreements with their employees, and to register these with the local labour office. In 2017, a new version of the official employment contract form was published. The official employment contract form requires a fixed term to be stated, with an option to renew the contract at the end of the employment term. The township labour offices, which administer the registration of these forms, stipulate as an internal practice for a maximum period of two years for each employment contract.
Employment on probation or as a trainee is not mandatory and depends on company policy. Employees who are on probation or are trainees are eligible for casual leave, medical leave, and maternity/paternity leave. However, the benefits under the SSL can be claimed when the employee already contributed with the minimum period under the SSL.
Hours Of Work
There is no statutory maximum on the number of hours that may be worked per week.
The stipulated working hours for shops, companies, trading centres, service enterprises, and entertainment houses is 8 hours a day. For factories, the prescribed working hours are not more than 44 hours a week. For oil fields and mines, it is not more than 44 hours a week. There are mandatory overtime payments that need to be paid for every hour/day worked beyond the prescribed limits. These have been set by the following laws where relevant:
1. The Factories Act 1951
2. The Shops and Establishments Law 2016 and Rules 2018
3. The Leave and Holidays Act 1951 and Rules 2018
4. The Oilfields (Labour and Welfare) Act 1951
Special Rules For Part-time Work
Working hours are normally set at eight hours a day or a maximum of 48 hours a week, according to the nature of work. Weekly working hours must not exceed 48 hours. Working hours under Shop and Establishment Law 2016 for shops, companies, trading centres, service enterprises and entertainment houses are as follows: eight hours a day, 48 hours a week, and overtime working hours shall not exceed 12 hours a week. The prescribed minimum rest should be at least 30 minutes after four hours of work.
Under current practices of the MLIP, overtime pay is double the employee’s basic salary. Under the SEL 2016, overtime is limited to a maximum of 12 hours per week, or 16 hours in cases of special needs. Overtime payment is double the hourly rate. The standard calculation method is as follows:
(Monthly salary x 12 months) x 2 / 52 weeks x 44 (or 48) hrs = Overtime hourly rate
Permitted overtime hours (new practice for MIC permitted companies):
- Maximum 20 hours per week.
- Maximum 3 hours per day.
- Maximum 5 hours for Saturday.
The Minimum Wages Law, which was passed on 22 March 2013, along with the Minimum Wage Rules of 12 July 2013, direct the National Committee to prescribe a minimum wage standard applicable to a wide number of sectors. The National Committee on Minimum Wages would consider existing salaries, living cost indices, standards of living, employment opportunities and various other considerations for setting the standard rate. The National Committee would also consider recommendations from the union, region and state committees in making its assessment.
The minimum wage, as announced by the National Minimum Wage Committee via its Notification No. 2/2015 on 28 August 2015, sets the national minimum wage at an hourly rate of MMK 450, and MMK 3,600 kyat for an 8-hour workday. The minimum wage applies to all employees regardless of age, industry, experience and region, except small businesses and family-run business with fewer than 15 employees. It is also highlighted that the National Minimum Wage Committee has issued its Notification No. 2/2018 for public consultation on 14 May 2018, regarding a proposed new minimum wage set at MMK 600 per hour, and MMK 4,800 for an 8-hour work day, applicable to all businesses except those with fewer than 10 employees. Confirmation is expected within 60 days.
Every employee is to be granted any and all gazetted public holidays amounting to 20-26 days in a calendar year. Starting from 2019, Union Government granted alternative holidays, although there is no statutory obligation to provide an alternative holiday when a public holiday coincides with a weekly off day. However, for purposes of wages, if an employee works on a public holiday coinciding with a weekly off day, the employee must be paid for that day.
Employees must be 16 years or older. There is no statutory retirement age for employees working in the private sector. For civil servants, the statutory retirement age is 60 years old. Mandatory retirement age can be set by the employer when the employer is not prohibited from doing so.
The Social Security Law 2012 provides for a number of benefits to employees and is applicable to any organisation with more than five employees. Employees are entitled to medical treatment and cash benefit for sickness, maternity, confinement, retirement and for funeral benefit. Medical treatment can be taken for up to 26 weeks starting from the date of treatment. For purposes of medical leave, Myanmar law allows up to 30 days to every employee for sickness. An application for medical leave must be supported by a medical certificate from a certified medical officer, doctor or any other certified medical practitioner. For cash benefit, employees need to have worked for at least 6 months with the establishment.
A unique feature of this legislation is that it makes express mention of an unemployment benefit insurance scheme, though it is not yet implemented. Under the Workmen’s Compensation Act, employers are liable to pay compensation for any injuries resulting from an accident arising during the course of employment, unless it has occurred due to negligence of the employee, such as due to intoxication or substance abuse.
Location Of Work/Mobility
Depending on the type of industry, an employer may be required to provide transport arrangements, such as ferries and shuttle buses, for the convenience of its employees.
There are pension schemes available for employees working with the government. However, under the Social Security Law, employers and workers will contribute to the social security fund for superannuation as per rates set by the MLIP in consultation with the Union Government, but this is not yet implemented by the social security board.
Parental Rights (Pregnancy/ Maternity/ Paternity/ Adoption)
Every female employee, insured under the Social Security System or not, is eligible for six weeks’ leave prior to delivery and for 8 weeks after delivery, up to a maximum of 14 weeks, as maternity leave with pay. In case of delivery of twins, an insured employee is eligible for an additional 4 weeks of maternity leave post-delivery. In case of miscarriage, an insured employee is entitled to 6 weeks of leave. An insured male employee is entitled to 15 days of leave for infant care after delivery. Every insured employee is eligible for leave for up to 8 weeks for child care in case of adoption of a child who has attained less than one year of age.
The law requires employment contracts to include minimum conditions of work. These are laid out in the Employment and Skill Development law, which contains provisions that are compulsory in the contract. Standard provisions, such as wages/salary, type of employment, location and working hours, have to be specifically stated. Additional terms, such as days off, meal arrangements, medical treatment, termination provisions, accommodation and transport arrangements, are all compulsory terms that need to be incorporated into the contract, if applicable to a given industry.
These may be anything apart from the bare minimum stated under the law. These can be mutually agreed by the parties, but shall not be less favourable than the minimum standards of employment under the law.
Types Of Agreement
Agreements are to be in writing and are generally contractual in nature. The contents of the mandatory employment contract template issued by the MLIP cannot be changed without prior government approval from the Directorate of Labour.
There are no specific obligations under law to protect a party’s confidentiality. However, these should be included within the contract for employment. The mandatory employment contract form covers the non-disclosure and confidentiality obligations of the employee. The Competition Law (2015) also contains general provisions for non-disclosure and confidentiality. There are no specific legal provisions requiring employers to protect employee privacy and personal data.
Ownership of Inventions/Other Intellectual Property (IP) Rights
Newly enacted Myanmar IP laws generally designate the employer, in case employee(s) created the work during the course of employment, as the default rights owner if any creation by the employee does not contradict the provisions under the employment agreement, if the employer does not fail to register the creation within the prescribed notice period, and if the employee does not waive the rights.
There are no provisions on pre-employment consideration under Myanmar labour laws, which mostly consider post-employment conditions.
Employers must ensure that their employees are permitted to work in Myanmar. At present, companies formed under the Myanmar Investment Law are eligible to hire non-nationals and apply for work permits and visas. For all other companies, whether locally owned or foreign, there are no restrictions for hiring non-nationals. However, they must ensure that valid documentation is in place. Labour authorities are currently in the process of drafting a Foreign Workers Law to establish specific laws for foreign nationals working in Myanmar. Once the draft is approved by the Union Government, it will be submitted to parliament for final review.
Hiring Specified Categories Of Individuals
There are special requirements for certain industries due to the nature of work involved, and these may have restrictions such as age limits. For instance, in hazardous industries, employees must be at least 18 years of age and must have a valid certification in the relevant field.
Outsourcing And/Or Sub-Contracting/Temporary Agency Work
Employers are free to outsource work or sub-contract, if necessary.