UPDATES ON MYANMAR LABOUR LAWS

Overview: Myanmar labour protection is a patchwork of many different labour

laws, most of which date back to the 1920s-1950s. There has been an effort by
the Government in recent years to update the laws and provide stronger
protection for the local workforce. As the Government rolls out new laws, it is
important for employers to keep themselves updated with the new
requirements. Below is the current status of labour protection laws in Myanmar.
Wages : Under the new Law on Minimum Wages (2013), a National Committee,
comprising representatives from the government, employers, and labour
organizations, would be set up to determine the new minimum wages, which
may vary from sector to sector. The law is unclear on whether commission and
tips may be included in the minimum wage. Employers must conspicuously post
the minimum wage notice and inform employees. Failure to pay minimum wage
may result in up to 6 month imprisonment and/or up to 300,000 Kyat fine.
Social Security: Social Security Law (2012) will become in force when the
President issues a notification to such effect. No date has been set for such a
notification. Currently, employers with 5 or more employees must enter into the
Social Security scheme. Employers and employees monthly contributions are
2.5% and 1.5% of the employees salary, and are capped at USD 5 and USD 3
respectively. Employees not covered under social security may claim for
compensation from the employer under Workmens Compensation Act (1923) for
injuries resulting in death or permanent disabilities.
Leave and Holidays: Employees are entitled to 6 days of casual leave, 10 days
of earned leave, 30 days of medical leave, and an average of 21 public holidays
per year with pay. Both casual leave and medical leave are granted based on
needs. Employers may require employees to present a medical certificate for
medical leave.
Working Hours: For blue collar work, working hours are limited to 8 hours per
day, 44 hours per week, and 6 days per week. The same hours apply to shops
and offices, except the maximum working hours per week is 48. Beyond these
hours, employers must pay overtime rate, which doubles that of ordinary wage.
Overtime may not exceed 12 hours per week for blue collar work and 16 hours
per week for offices and shops.
Employment Contract: The new Employment and Skills Development Law
(2013), which will become in force on 30th November 2013, requires that a work
contract be signed within the first 30 days of employment. Important terms
must be included in the contract (See Section 5(b) of the law). The employers
must then send a copy to one of the 77 labour exchange offices for approval. It
is still unclear whether the government will strictly enforce the contract approval
process as the labour exchange offices may lack the manpower to review all the
contracts submitted. The penalty for violating or failing to sign an employment
contract is up to 3 or 6 month imprisonment, a fine, or both.

Training: New Employment and Skills Development Law aims to institutionalize

training and skill development as part of the national workforce planning. When
the new law comes into effect, employers must contribute an amount equivalent
to 0.5% of employees salary to Employee Skill Development Fund. In addition,
employers must provide training in line with the policy of the Skill Development
Team in the form of on-the-job training, systematic training program, or outside
training, at employers expense. Employers may condition the training upon
minimum employment term.
Labour Organisation: After Labour Organisation Law was promulgated in
2011, there are now more than 500 registered labour unions. Union registration
applications are examined by Township Registrar and approved by the Chief
Registrar. There are 5 levels of labour organizations basic level (at least 30
members), township level, region or state level, federation level, and
confederation level. Employers may not terminate employees for joining a
union. Likewise, employees cannot be forced to join a union.
Labour Dispute Resolution: Settlement of Labour Dispute Law (2012)
provides an ascending system of dispute resolution. Employers with more than
30 employees must form a workplace coordinating committee, which helps
resolve disputes initially. If no agreement is reached, the dispute may be
escalated to the conciliation body, the arbitration body, and eventually the
arbitration council. Parties may still sue in court during the administrative
process.
A strike or a lockout may be carried out only after the arbitration process fails.
The law does not permit a strike by workers in essential services (water,
electricity, firefighting, health, and telecommunications). Non-essential services
may become essential if a strike drags on so as to give rise to disproportionate
damages, preventing a lengthy strike.
Workers in public utilities sector must notify employer and conciliation body of a
strike at least 14 days in advance and continue to provide limited services
during the strike. Employers likewise must notify employees at least 14 days in
advance and also receive permission from the conciliation body before
implementing a lockout. The notification period is shortened to just 3 days for
other sectors. Employers do not have to pay wages during a strike and are
entitled to take disciplinary measures against employees who participate in an
illegal strike.
Additional Requirements under Foreign Investment Law: Employers may
not hire unskilled foreign workers. For an FIL company, 25% of its skilled
workforce must comprise of Myanmar nationals within the first two years, 50%
within the second two years, and 75% within the third two years.
Visa and Work Permit: Foreign employees should obtain a business visa.
Myanmar Embassies will issue a business visa with single entry twice before one
with multiple entries the third time. The validity period for a business visa with
multiple entries is 6 months or 1 year, although continuous stay may not exceed
70 days on each visit. Foreign employees staying long term should obtain a stay
permit (for those staying longer than 70 continuous days), a multiple journey
special reentry visa (for overseas travel during the stay permit validity period),
and a foreigner registration certificate

(for those staying longer than 3 continuous months). Foreign employees in an

FIL company should obtain the same as well as a work permit. There is currently
no work permit system for foreign employees in a non-FIL company.
Conclusion: Employers should continuously update their employment policy to
keep themselves in compliance.
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This article was prepared by Siri Lerdsirisopon, senior associate at Vovan &
Associes, No. 162, First Floor, 35th Street, Kyauktada Township, Yangon, P.O. Box
1126, Myanmar. siri.lerdsirisopon@vovan-bangkok.com