Legal Band-Aid

“ ’Tis no sin for a man to labor in his vocation.”

It has always been the responsibility of Myanmar Government to promulgate the laws to protect the rights of workers in accordance with Section 24 of the Constitution of the Republic of the Union of Myanmar. In addition, the Government shall prohibit forced labor as per Section 359 of the Constitution of the Republic of the Union of Myanmar.

Hence, through perusing this digest, one could learn how Myanmar Government fulfils its responsibilities regarding labor sector.

1. Mandatory Requirement to conclude Employment Contracts

It is, pursuant to Section 5 (a) (1) of the Employment and Skill Development Law 2013, mandatory for the employer to conclude Employment Contract (will be shortened as “EC” onwards) with the Employee within 30 days of his or her employment excluding the pre-employment training the employee has to attend if there is such pre-employment training.

However, Notification No. 140/2017 issued by the Ministry of Labor, Immigration and Population came out with:

• an exemption from such mandatory requirement (which detailed: factories, workshops, companies, businesses and the government departments and organizations less than five employees are exempted from this mandatory requirement to conclude an employment contract),
• a “must-use” template of EC to be used and
• the additional requirement regarding the EC which is to obtain the approval from the relevant township or district labor exchange office after EC had been concluded.

[Comment: “However, it is a grey area for me to understand that whether the law require the temporary worker whether paid daily or paid after the work is done who is working for either a factory or workshops, companies or businesses and governmental departments and organizations which have more than five workers. Since we do not know the answer just by reading the law, the said issue is quite intriguing.”]

2. Working Hours, Overtime and Working Age

It is always quite bothersome to look for specific provisions regarding the usual working time and the overtime under specific laws depending on the nature of works.

2.1 Shops and Establishment Law 2016

2.1.1 Opening and Closing Hours [for shops and establishments]

• The shops and establishments are to be closed from 11 pm to 5 am (in case there is a person waiting to buy or waiting for the service at 11 pm, to sell or service within 30 minutes after 11 pm.) [Section 7 of Shops and Establishment Law 2016]
• The shops and establishments for public entertainments are to be closed between 1 am to 5 am except theaters, entertainments, and places held for funfair free of charge for public entertainment. [Section 8 of Shops and Establishment Law 2016]
• In case the shops and establishments are required to be opened for 24 hours a day, the employer of shops and establishments is required to request permission from the Factories and General Labor Laws Inspection Department in advance. [Section 9 of Shops and Establishment Law 2016]

Since the state power takeover in February 2021, State Administration Council has issued the curfew (known as “Section 144”) set for every Region and State in Myanmar, from 12 am to 4 am, and therefore, it is to be understood here that it is not possible for the shops and establishments or any other types of entities to open 24 hours at the moment.

2.1.2 Overtime [for shops and establishments]

• The employee working in a shop or establishment is not allowed to work for more than 8 hours per day or 48 hours per week, but with his or her consent, he or she may work overtime and the total overtime hours shall not exceed 12 hours in a week and in a special case, to not exceed 16 hours. And, the overtime shall not past midnight. Please note that even if he has consented to work overtime, he or she shall not work for more than 11 hours a day including the time for recess and overtime. [Sections 11 and 12 of Shops and Establishment Law 2016]

If the employee has not attained Age 18,

• In case the employee has not attained 16 years of age, he or she cannot work overtime more than the prescribed working hours in a shop or establishment. Plus, the employee (other than security guards or watchman) shall not be asked to work for more than 4 hours consecutively without recess at least 30 mins in any day. [Sections 11, 12 and 13 of Shops and Establishment Law 2016]
• If a person does not attain 14 years of age, he or she cannot work for any shop or establishment. If he or she is younger than 16, he or she may work with the permission of a doctor in charge who has the right to issue the fitness certificate to work but not more than four hours a day. [Sections 13 and 14 of Shops and Establishment Law 2016]
• If the employee is already 14 but not 16, he or she shall not be compelled or allowed to work between 6 pm to 6 am or to work in any other shop or establishment on the same day. [Section 14 of Shops and Establishment Law 2016]

2.2 Factories Act 1951

Before the overtime provisions under the Factories Act comes up, the following definitions should be aware of:

• Child means a person who has not attained Age 14.
• Adolescent means a person who has turned 16 but not attained Age 18.
• Adult means a person who has attained Age 18.
• A child or an adolescent cannot work at factories unless they have the certificate of fitness granted by a certifying surgeon and a child who has not attained thirteen years of age. [Sections 75 and 77 of Factories Act]

2.2.1 Overtime [For Factories]

(For Adult Workers)

• Shall not be compelled or allowed to work in a Factory for more than 44 hours in a week but an adult male worker in a factory for technical reasons may work 48 hours a week [Section 59 of Factories Act]
• Shall not work on Sunday if he/she does not have a full holiday on one of three days before or after Sunday or if he/she was asked to work on holidays or on a substituted day, the manager of the factory shall send notice of his intention requiring the worker to work on Sunday or on a substituted day and also display in the factory for not less than 24 hours before any of such two days which even is earlier and until the expiry of such two days whichever is later [Section 60 of Factories Act]
• Shall, if deprived of any weekly holidays, be entitled to number of holidays equal to the number of holidays so lost within the next two calendar months [Section 61 of Factories Act]
• Shall not be compelled or allowed to work for more than eight hours in any day [Section 62 of Factories Act]
• Adult workers shall not work for more than five hours consecutively without recess and for every five hours he/she works, there shall be 30 minutes of recess [Section 63 of Factories Act]
• If worked overtime, shall be entitled to twice his ordinary rate of wages [Section 73 of Factories Act]
• The daily working hours including the time for recess mentioned above shall not exceed 10 hours but, may work more than 10 hours with the approval from the Labor department [Section 64 of Factories Act]
• Shall not be required or allowed to work in any other factory on the same day on which he has been working in any factory [Section 74 of Factories Act]

(For Child and Adolescent Workers)

• A child shall not employ or work in any factory for more than four hours a day and between 6 p.m. and 6 a.m.. [Section 79 of Factories Act]
• The period of work for children shall be limited to two shifts and the shifts shall not be overlapped. Both shifts shall not exceed five hours including the intervals if any. [Section 79 of Factories Act]

3. Payment of Wages and Minimum Wage

According to Notification 2/2018 issued by the National Minimum Wage Committee, the minimum wage is 600 Kyats per hour and for an 8-hour working day, the minimum wage is 4,800 Kyats and this minimum wage is applied to every worker in the Republic of the Union of Myanmar. In addition, recently, the National Minimum Wage Committee issued Notification 1/2023 on the Amendment of Minimum Wage and under this Notification, the National Minimum Wage Committee stipulates that the workers in Myanmar, those who are working in CMP Factories and factories, are entitled to receive a minimum wage rate of 600 Myanmar Kyats per hour or 4,800 Myanmar Kyats per 8-hour working day and also to an additional allowance of 1,000 Myanmar Kyats per working day. Therefore, based on this Notification, the workers working in factories are now entitled to receive a total of at least 5,800 Myanmar Kyats per working day. But, this does not mean the minimum wage amount has changed and it is still 4,800 Myanmar Kyats per 8-hour working day but, with an additional allowance of 1,000 Kyats per one working day.

4. Leave and Holidays

The employee is entitled to a day-off per week with a basic salary which he or she is entitled to. [Section 8 of Leave and Holidays Rules]

4.1 Casual Leave

• According to the Leave and Holiday Rules, the employees are entitled to take casual leave, medical leave or maternity leave even during the probation period. [Section 5 of Leave and Holiday Act and Section 24 of Leave and Holiday Rules]
• Regarding the casual leave, the employee can take the casual leave up to three consecutive days with respective wage or full basic salary within the respective year for every two months of service from that worker’s service. However, the employer may allow the casual leave even if the employee has not completed two months of his or her service. [Sections 28 and 29 of Leave and Holiday Rules]
• Please note that if the employee requests other types of leave continuous with casual leave, casual leave will be void and the other type of leave will be counted starting from the day the casual leave begins. [Section 31 of Leave and Holiday Rules]

4.2 Earned Leave/Annual Leave

• The employee is entitled to take earned leave proportionately after completing twelve consecutive months of employment, but during those twelve consecutive months of employment the employee must have worked 20 days per month at least. [Section 34 of Leave and Holidays Rules and Section 4 of Leave and Holiday Act]
• Please note that days off and gazette holidays which fall within ten consecutive days of annual leave will be counted as annual leave.

4.3 Maternity Leave

• The female employees are entitled to six weeks of paid maternity leave before delivery and eight weeks after delivery. [Section 7-A of Leave and Holiday Act]
• In case of miscarriage, the female employee is entitled to a maximum six weeks starting from the date of miscarriage. [Section 48 of Leave and Holiday Rules]

4.4 Gazette Holidays

• The daily wage worker or the piece-work worker who has fully performed their duties for the weekly working hours is entitled to a gazette holiday with the full respective wages. [Section 16 of Leave and Holiday Rules]

5. Social Security

The following establishments are required to register for the social security;

• industries which carry out business whether or not they utilize mechanical power or a certain kind of power, businesses of manufacturing, repairing and servicing, or engineering businesses, factories, warehouses and establishments;
• government departments, government organizations, and their subordinate departments and branch offices which carry out business;
• development organizations;
• financial institutions;
• companies, associations, organizations, and their subordinate departments and branch offices which carry out business;
• shops, commercial establishments, public entertaining establishments;
• government departments and government organizations which carry out business or transport businesses owned by regional administrative body, and transport businesses carried out with the permission of such department, body or in joint venture with such department or body;
• constructions carried out for a period of one year and above under employment agreement;
• businesses carried out with foreign investments or citizen investment or joint ventured businesses;
• businesses relating to mining or gem contained in any applicable law;
• businesses relating to petroleum and natural gas contained in any applicable law;
• ports and out-ports contained in any existing law;
• businesses and organizations carried out with freight handling workers;
• Ministry of Labor and its subordinate departments and organizations;
• establishments determined by the Ministry of Labor from time to time, that they shall be applied with the provisions of compulsory registration of Social Security and benefits contained in this Law in coordination with Social Security Board with the approval of the Union Government. [Section 11 (a) of Social Security Law 2012]

Please note that those establishments which are required to complied with the mandatory registration for social security shall still be required to respect such mandatory registration requirement even though the business is still carried out by one or more workers which is less than the stipulated minimum number of workers or changing the employer or changing the type of business. [Section 11 (b) of Social Security Law 2012]

For the insured[1], the following benefits will be granted;

• Health and Social Care Insurance
• Family Assistance Insurance and
• Invalidity Benefit, Superannuation Benefit and Survivor’s Benefit Insurance
• Unemployment Benefit Insurance
• Other Social Security. [Section 13 of Social Security Law 2012]

6. Do Employees have non-compete obligations?

No. Under Contract Act 1872, Section 27 adopts the idea that the employee is not bound to have a non-compete obligation since the said Section mentions that every agreement by which anyone is restrained from exercising a lawful profession, trade or business of any kind is to that extent void. Therefore, even if there is no ties left between the employer and the employee, the employee is not bound by any agreement to have a non-compete obligation.

Scope of this Article

The article is prepared and written on 17 November 2023 and therefore, the scope of this article is set and limited to the existing laws, rules and regulations so far as applicable up to the date of the article.

Qualification of this Article

The article is not a complete guide to Myanmar labor laws and is served for the knowledge sharing purposes in good faith and the interpretation of the provisions quoted here is done solely based on the legal knowledge and personal interpretation of the author. Therefore, should this article be used as legal advice by any other party, whether for a natural person’s or corporation’s affairs, the author has no legal obligation or the author is not held accountable for such person or corporation for any reason whatsoever.

Laws, rules and regulations observed for this article include:

• The Contract Act 1872 of Myanmar
• The Employment and Skill Development Law 2013 (Pyidaungsu Hluttaw Law No. 29/2013)
• Shops and Establishments Law 2016 (Pyidaungsu Hluttaw Law No. 18/2016)
• Social Security Law 2012 (Pyidaungsu Hluttaw Law No. 15/2012)
• Factories Act 1951 amended up to 2016 (Act No. 65 of 1951)
• Notification No. 140/2017 issued by the Ministry of Labor, Immigration and Population dated 28 August 2017

[1] As per Section 2 (c)of the Social Security Law, the Insured means a worker who is working at any establishment relevant to this Law and who has insured through registration under the Social Security System and Employment Injury Benefit Insurance System or a worker who is responsible to insure or a person who effects insurance voluntarily under the Social Security System and Employment Injury Benefit Insurance System although he is not working at any establishment relevant to this Law.

Profile of Author

Ingyin Hmwe @ Liliana [LL.B. Graduate of University of Yangon (2018), LL.M Candidate in Business Law (International Program) of Chulalongkorn University]

Ms. Ingyin Hmwe @ Liliana has a wealth of experience in labor disputes, particularly those involving lockouts and strikes. She is also proficient in drafting employment contracts, conducting trademark registration, preparing contractual agreements, legal memorandums, and translations. Her expertise extends to legal research and providing legal due diligence reports, primarily in the context of land-related matters.

Ingyin is a proficient bilingual speaker, fluent in both English and Burmese. She can adeptly conduct consultations in either of those languages. Moreover, Ingyin is presently serving as a litigation apprentice to become eligible for a Higher Grade Pleader License.

Ingyin has previously earned a Bachelor of Laws (LL.B.) degree from the University of Yangon, and she is currently pursuing her Master’s degree as an LL.M. candidate at Chulalongkorn University, specializing in Business Law.

In addition to her impressive academic qualifications, Ingyin has also initiated a philanthropic project titled “Legal Band-Aid.” In collaboration with her peers and senior colleagues, there, she actively imparts her legal knowledge to aspiring law students.

Contact Information

For any questions or clarifications, please reach out to:

Email: ingyinhmwe97@gmail.com

Line: chinsu08

WhatsApp: +959 420 092 776

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LinkedIn: http://www.linkedin.com/in/ingyin-hmwe-a64665260

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