Legislation and agenciesPrimary and secondary legislation
What are the main statutes and regulations relating to employment?
The main statutes and regulations relating to employment in Myanmar are the:
- Leave and Holidays Act (1951);
- Social Security Law (2012) (SSL) and the Social Security Rules;
- Minimum Wages Act (2013) (MWA);
- Payment of Wages Act (2016);
- Employment and Skills Development Law (2013) (ESDL);
- Shops and Establishments Law (2016);
- Labour Organisation Law (2011);
- Factories Act (1951);
- Settlement of Labour Disputes Law (2012) (SLDL) and Settlement of Labour Disputes Rules (2012); and
- Notification No. 84/2015 on severance payments (Notification 84).
Is there any law prohibiting discrimination or harassment in employment? If so, what categories are regulated under the law?
There are no dedicated laws that specifically prohibit discrimination or harassment in employment.; however, there are some general protections against discrimination accorded to Myanmar citizens under the Constitution. For example, article 349 of the Constitution provides that citizens enjoy equal opportunity in the carrying out of public employment, occupation, trade, business and technical know-how and vocation. Article 350 of the Constitution accords protection to women by providing that they be entitled to the same rights and salaries as that received by men in respect of similar work. Article 352 of the Constitution prohibits discrimination on the basis of race, birth, religion and gender in the appointment of civil service personnel, provided that the candidate meets the qualifying criteria.
The standard employment contract prescribed by the Ministry of Labour, Immigration and Population (MOLIP) contains a clause that prohibits discrimination and unequal treatment on the basis of being a member of a union or factors relating to race, religion, gender or age.
Finally, certain statutes contain stand-alone provisions against discrimination; for example, the MWA prohibits discrimination between male and female employees and mandates that all employees must be treated equally in respect of the payment of minimum wages.Enforcement agencies
What are the primary government agencies or other entities responsible for the enforcement of employment statutes and regulations?
The MOLIP is the primary government agency that is responsible for the enforcement of employment statutes and regulations. The respective township, regional and state level labour offices under the MOLIP are responsible for such enforcement and for handling the day-to-day employment issues that may arise. The Social Security Board is responsible for all matters under the SSL and the Social Security Rules, including the collection of social security contributions.
Worker representationLegal basis
Is there any legislation mandating or allowing the establishment of employees’ representatives in the workplace?
The Labour Organisation Law (LOL) provides for the formation of a basic labour organisation at the factory level if at least 30 workers and at least 10 per cent of all the workers of the factory approve the formation of the labour union. Umbrella labour organisations may be formed at the township, regional, state and union levels.
In addition, sections 3 to 5 of the SLDL stipulates that for any business in which more than 30 workers are employed, the employer must form a workplace coordinating committee to promote good relationships between employers and workers or labour organisations, and to negotiate and coordinate on the conditions of employment, labour terms and conditions, occupational safety, health, welfare and productivity.Powers of representatives
What are their powers?
Under the LOL, labour organisations have the right to:
- draw up their own constitution and rules, elect their representatives, organise their administration and activities and formulate their programmes;
- negotiate and settle with the employer if the workers are unable to obtain and enjoy the rights that are prescribed under the relevant labour laws;
- submit demands to the employer and make claims in accordance with the relevant laws if an agreement cannot be reached;
- demand an employer to reappoint a worker if he or she is dismissed by the employer and if there is a cause to believe that the reasons for the dismissal were based on labour organisation membership or activities, or were not in conformity with the labour laws;
- send representatives to the relevant conciliation body (constituted under the Settlement of Labour Disputes Law) in settling a dispute between the employer and the workers;
- participate in discussions with the government, the employer and aggrieved workers in relation to the rights of workers contained in the labour laws; and
- participate in resolving collective bargaining arrangements between workers and employers in accordance with the labour laws.
Background information on applicantsBackground checks
Are there any restrictions or prohibitions against background checks on applicants? Does it make a difference if an employer conducts its own checks or hires a third party?
There are currently no laws that restrict or prohibit the conduct of background checks on potential employees by an employer. There are also no restrictions or prohibitions on hiring a third party to carry out background checks on a potential employee.
However, section 8(b) of the Law Protecting Privacy and Security of Citizens (2017) (the Privacy Law) states that in the absence of an order, permission or warrant issued under the existing law or permission from the President or a union-level government body, no citizen may be subjected to surveillance, spied upon or investigated in a manner that could disturb his or her privacy and security or affect his or her dignity. There are, however, no reported cases of actions being taken by the Myanmar authorities against employers pursuant to section 8(b) of the Privacy Law.Medical examinations
Are there any restrictions or prohibitions against requiring a medical examination as a condition of employment?
There are currently no legal or regulatory restrictions or prohibitions against requiring a medical examination as a condition of employment. As such, an employer may potentially refuse to employ an applicant who does not submit to a medical examination.Drug and alcohol testing
Are there any restrictions or prohibitions against drug and alcohol testing of applicants?
There are currently no legal or regulatory restrictions or prohibitions against the drug and alcohol testing of applicants. Accordingly, an employer may potentially refuse to employ an applicant who does not submit to a drug or alcohol test.
Hiring of employeesPreference and discrimination
Are there any legal requirements to give preference in hiring to, or not to discriminate against, particular people or groups of people?
The Standard Employment Contract prescribed by the Ministry of Labour, Immigration and Population (MOLIP) prohibits discrimination and unequal treatment on the basis of being a member of a union or factors relating to race, religion, gender or age.
In addition, the Myanmar Investment Law (MIL) and the Special Economic Zones Law (the SEZ Law) prescribe certain requirements in relation to the hiring of local workers. Section 51(b) of the MIL requires investors to implement plans for the capacity building of Myanmar citizens to be able to appoint them to management or advisory roles or as technical or operational experts. Section 51(c) of the MIL mandates that only Myanmar citizens can be appointed for unskilled work.
The SEZ Law applies to all businesses established in any of the designated special economic zones in Myanmar. Section 74 of the SEZ Law mandates that only Myanmar citizens can be employed for work that does not require superior technology or skills. Further, Section 75 of the SEZ Law stipulates that investors must adhere to the following hiring pattern when hiring for positions that require familiarity with technology or skill:
- years one to two: at least 25 per cent of the employees for those positions should be Myanmar citizens for the first two years from the year of commencement of operation;
- years three to four: at least 50 per cent of the employees for those positions should be Myanmar citizens for the next two years; and
- years five to six: at least 75 per cent of the employees for those positions should be Myanmar citizens for the subsequent two years.
However, Section 78 of the SEZ Law allows employers to hire more foreign employees than the number designated in the investment plan after obtaining permission from the relevant special economic zone management committee.
Must there be a written employment contract? If yes, what essential terms are required to be evidenced in writing?
Section 5(a)(1) of the Employment and Skills Development Law (ESDL) mandates that an employer must enter into a written employment contract within 30 days of employment. Section 5(g) of the ESDL mandates that the written contract must be registered with the local township labour office. The MOLIP provides a standard employment contract that must be used for all local Myanmar employees. Any amendment, addition or deletion to the terms contained in standard employment contract must be pre-approved by the relevant township labour office. Based on the current policy and practice of the MOLIP, there is currently no requirement to follow the standard employment contract in the case of foreign employees.
Section 5(b) of the ESDL sets out the following list of essential terms and details that are required to be included in an employment contract under Myanmar law:
- the job title;
- the probationary period;
- the wages or salary;
- the place of work;
- the duration of the contract;
- the working hours;
- rest days, holidays and leave;
- overtime work;
- arrangements for meals during the period of work;
- medical treatment;
- ferry service and travel;
- the rules to be followed by the employee;
- agreement by worker regarding the duration he or she must work after attending any training course arranged by the employer;
- resignation and termination of service;
- termination of employment contract;
- responsibilities according to rules in the employment contract;
- annulment of the employment contract by mutual agreement of employer and worker; and
- addition, change or amendment to the terms of the employment contract.
To what extent are fixed-term employment contracts permissible?
There are no legal or regulatory restrictions against entering into fixed-term employment contracts. In practice, local labour offices typically require all employment contracts to specify a contract term and impose a maximum term limit of two years on employment contracts, after which they will need to be renewed. However, the maximum term limit prescribed by the relevant labour office may vary from one labour office to another. It may also be subject to the MOLIP’s internal policy from time to time.Probationary period
What is the maximum probationary period permitted by law?
The labour laws do not place restrictions on the maximum probationary period to be permitted in an employment contract. The standard employment contract prescribed by the MOLIP provides for a probationary period of three months.
In practice, the probationary period may be extended, or discretion could be given to the employer to extend the probationary period, by inserting the relevant contractual amendment to the standard employment contract, provided that the amendment is approved by the relevant township labour office.Classification as contractor or employee
What are the primary factors that distinguish an independent contractor from an employee?
The labour laws do not provide any clear guidance on this issue. Certain labour laws, such as the ESDL, contain broad definitions of ‘employee’ or ‘worker’ that could technically include a person, such as an independent contractor, who provides a service for the company in exchange for a fee. However, there is a dearth of case law on the issue, and it remains to be seen how the courts or labour tribunals will distinguish an independent contractor from an employee.
In practice, labour tribunals may take guidance from other common law jurisdictions in identifying the relevant factors to take into consideration in distinguishing an independent contractor from an employee, and will also tend to look at the substance of the arrangement over the form (ie, the express terms of the contract).Temporary agency staffing
Is there any legislation governing temporary staffing through recruitment agencies?
There is currently no such legislation in force.
Are there any numerical limitations on short-term visas? Are visas available for employees transferring from one corporate entity in one jurisdiction to a related entity in another jurisdiction?
There are currently no numerical limitations on short-term visas. Foreign employees can work in Myanmar as long as they hold a valid business visa.
A single-entry business visa permits the holder to stay in Myanmar for up to 70 days from the date of arrival in Myanmar. Thereafter, the visa holder must leave Myanmar, re-enter and apply for a new business visa.
A multiple-entry business visa permits the holder to stay in Myanmar for a period of three months, six months or one year, and to leave and re-enter Myanmar multiple times during the period of validity of the visa. Secondment from an overseas office to work in a related corporate entity in Myanmar is typically a valid supporting reason for the grant of a business visa.
In addition to the requirement for a valid visa, any stay beyond 90 consecutive days in Myanmar also requires the visa holder to apply for a Foreigner Registration Certificate.Spouses
Are spouses of authorised workers entitled to work?
There are currently no legal restrictions prohibiting a spouse of a person entering Myanmar on a separate business visa from working in Myanmar.General rules
What are the rules for employing foreign workers and what are the sanctions for employing a foreign worker that does not have a right to work in the jurisdiction?
At present, there are no specific rules in place regarding the employment of foreign workers. However, employers should take note of section 13(5) of the Immigration (Emergency Provisions) Act (1947), which states:
Whoever assists or attempts to assist any person to enter the Union of Myanmar illegally or knowing that foreigner is remaining in the Union of Myanmar in contravention of any of the provisions of this Act or the rules made there under wilfully assists or attempts to assist him to remain in the Union of Myanmar shall be punished with imprisonment for a term not exceeding two years or with fine, or with both.”
Although there is no law that prohibits an employer from employing an individual with no visa or permit to work in Myanmar, an employer may be caught by the above provision if it is found that the employer actually assisted or attempted to assist a worker to enter or to remain in Myanmar, knowing that the worker was doing so illegally.Resident labour market test
Is a labour market test required as a precursor to a short or long-term visa?
No, there is currently no requirement for a labour market test as a precursor to a short term or long-term business visa.
Terms of employmentWorking hours
Are there any restrictions or limitations on working hours and may an employee opt out of such restrictions or limitations?
For workers in a factory, sections 59 and 62 of the Factories Act (FA) stipulate that workers can work for no more than eight hours per day and 44 hours per week, although an adult male worker in a factory engaged in work that, for technical reasons, must be continuous throughout the day may work for up to 48 hours in a week. Any work done with the permission of the employer in excess of the stipulated daily or weekly limits entitles the employee to overtime pay.
In addition, no worker is allowed to work for more than five hours before having at least half an hour of rest in between, and the periods of work and rest must not be spread over more than 10 hours in any given day (sections 63 and 64 of the FA).
For other kinds of employed work, section 11 of the Shops and Establishments Law provides that an employee can work for no more than eight hours per day and 48 hours per week. Any work done with the permission of the employer in excess of the stipulated daily or weekly limits entitles the employee to overtime pay.
In addition, except for certain exceptions, no worker can work for more than four hours before having at least half an hour of rest in between, and the total number of hours of work and overtime work, including a one-hour interval for rest, must not exceed 11 hours in any given day. The total number of overtime hours must not exceed 12 hours for any one week, or 16 hours per week in special cases. In addition, overtime work must not extend beyond midnight.Overtime pay
What categories of workers are entitled to overtime pay and how is it calculated?
All employees are entitled to overtime pay. Based on the current policy of the Ministry of Labour, Immigration and Population and section 73 of the FA, overtime pay is calculated at the rate of double an employee’s basic wage. The following formula is typically used for the calculation of overtime pay:
Overtime pay = [(monthly salary x 12) or 52 weeks or 44 (or 48 as the case may be) hours] x 2
Can employees contractually waive the right to overtime pay?
The labour laws are silent on whether an employee can contractually waive the right to overtime pay. However, the local labour offices currently take the position that the right to overtime pay cannot be contractually waived by an employee.Vacation and holidays
Is there any legislation establishing the right to annual vacation and holidays?
Yes. Under the Leave and Holidays Act (LHA), an employee is entitled to 10 days of earned leave per year provided that he or she has completed 12 consecutive months of service in the previous year, with a minimum of 24 working days per month. Employees have to forfeit one day of earned leave for every month during the preceding 12-month period when they did not work for at least 24 days. For the purposes of calculating the number of days worked in a month, weekends, public holidays and entitled leave are counted as working days.Sick leave and sick pay
Is there any legislation establishing the right to sick leave or sick pay?
Yes. Under the LHA, an employee is entitled to 30 days of medical leave with pay provided that he or she has been employed for at least six months. Where the employee has not yet completed six months of employment, he or she is entitled to medical leave but without pay. Where the employment is for a period of service of less than 12 months, the entitlement to medical leave is reduced proportionately.Leave of absence
In what circumstances may an employee take a leave of absence? What is the maximum duration of such leave and does an employee receive pay during the leave?
The LHA provides that employees are entitled to six days of paid casual leave per year. Casual leave cannot be combined with any other kind of leave, and if a person does not take the casual leave that he or she is entitled to within the year, it will lapse.
Apart from the above, the labour laws do not prescribe specific rules on the circumstances that would entitle an employee to take a leave of absence, the maximum duration of such leave and how much pay an employee would receive during that period.Mandatory employee benefits
What employee benefits are prescribed by law?
The employee benefits prescribed under Myanmar law are largely contained within the social security framework as set out in the Social Security Law (SSL) and the Social Security Rules. The benefits under the SSL are categorised into five social security systems, namely the:
- health and social care insurance system;
- family assistance insurance system;
- invalidity benefit, superannuation pension benefit and survivors’ benefit insurance system;
- unemployment benefit insurance system; and
- other social security system.
At present, only the health and social care insurance system and the invalidity benefit, superannuation pension benefit and survivors’ benefit insurance system have been implemented.Part-time and fixed-term employees
Are there any special rules relating to part-time or fixed-term employees?
There are no special rules relating to part-time or fixed-term employees. All employees, including temporary workers, are entitled to the same rights and benefits as permanent employees, subject to certain adjustments to allocate certain benefits on a pro rata basis according to the nature of the work arrangement.Public disclosures
Must employers publish information on pay or other details about employees or the general workforce?
There is no general legal requirement to publish information on pay or other details about the employees or general workforce; however, such information may need to be submitted to the relevant government authorities as part of applications for licences or permits (eg, applications under the Special Economic Zones Law or the Myanmar Investment Law).
Post-employment restrictive covenantsValidity and enforceability
To what extent are post-termination covenants not to compete, solicit or deal valid and enforceable?
Section 27 of the Contract Act (1872) provides that agreements that restrain individuals from exercising a lawful profession, trade or business of any kind are to that extent void. There is a dearth of reported cases in the courts on the application of section 27 of the Contract Act in the context of post-employment restrictive covenants. In practice, the courts may take guidance from other common law jurisdictions, recognise the validity of restrictive covenants in certain circumstances or subject the covenants to a requirement of reasonableness and proportionality in the scope, geographical limits and duration of the restrictions.Post-employment payments
Must an employer continue to pay the former employee while they are subject to post-employment restrictive covenants?
Myanmar law does not currently impose such a requirement.
Liability for acts of employeesExtent of liability
In which circumstances may an employer be held liable for the acts or conduct of its employees?
Myanmar law has yet to develop any clear legal rules to determine under which circumstances an employer may be held liable for the acts or conduct of its employees. Section 226 of the Contract Act provides generally that principals can be held liable for the acts of their agents, except to the extent that their agents’ actions are beyond the scope of their work or service. However, it is not clear whether the principal–agent relationship described under the Contract Act would apply in the context of an employment relationship.
Taxation of employeesApplicable taxes
What employment-related taxes are prescribed by law?
All employees, regardless of their nationality, are subject to the payment of personal income tax at progressive rates from zero per cent to 25 per cent.
Employee-created IPOwnership rights
Is there any legislation addressing the parties’ rights with respect to employee inventions?
The Copyright Law (2019), which was passed on 24 May 2019, provides that economic rights in a copyrighted work made for hire in an employer–employee relationship will, as a general rule, be held by the employer unless there is an agreement to the contrary. However, the Copyright Law has yet to come into force.Trade secrets and confidential information
Is there any legislation protecting trade secrets and other confidential business information?
There is no legislation on the protection of trade secrets or confidential business information in Myanmar. As such, Myanmar common law principles relating to trade secrets and confidentiality will apply in the absence of such legislation.
Data protectionRules and obligations
Is there any legislation protecting employee privacy or personnel data? If so, what are an employer’s obligations under the legislation?
There are no specific legal provisions governing employee privacy and personal data; however, the general protections accorded to Myanmar citizens under the Law Protecting Privacy and Security of Citizens (the Privacy Law) should also apply to local employees. These include:
- the right not to be surveyed, spied upon or investigated in a manner that could disturb their privacy and security or affect their dignity under section 8(b);
- the right not to have their communication with another person or communications equipment intercepted or disturbed with in any way under section 8(c); and
- the right not to have their personal telephone and electronic communications data be demanded or obtained from telecommunication operators under section 8(e).
Business transfersEmployee protections
Is there any legislation to protect employees in the event of a business transfer?
There is no specific legislation to protect employees in the event of a business transfer. In practice, the labour office requires an employer to first discuss any intended transfer with its employees and obtain their consent to the transfer of employment, or otherwise terminate their employment by paying the necessary severance payments prescribed under Notification No. 84/2015.
Termination of employmentGrounds for termination
May an employer dismiss an employee for any reason or must there be ‘cause’? How is cause defined under the applicable statute or regulation?
The standard employment contract stipulates the circumstances and the mode of termination of employment. An employer can terminate the employment of an employee for misconduct without making severance payment provided it has provided three warnings (one verbal warning and two written warnings) to the employee. An employee can only be dismissed after a further violation is made within 12 months of the third warning.
In the event that an employee commits a serious offence as set out in Annex B of the standard employment contract, an employer can immediately dismiss the employee without any severance payment.
Notwithstanding the above, an employer can terminate the employment of an employee without any misconduct by giving at least one month’s prior notice and making the necessary severance payment prescribed under Notification No. 84/2015 (Notification 84).
In addition to the above, the standard employment contract also provides that the contract may be terminated for the following reasons:
- the winding-up of the business of the employer;
- the suspension of business owing to unforeseeable events; and
- the death of the employee.
Must notice of termination be given prior to dismissal? May an employer provide pay in lieu of notice?
In an employee is terminated without any misconduct on his or her part, the employer must provide at least one month’s prior notice and make payment of the severance amount pursuant to Notification 84.
If the employer wishes to terminate the employment of the employee during the probationary period, it must provide at least 30 days’ advance notice in writing to the employee. Alternatively, it can provide one month’s salary in lieu of notice (this option is only available if the employee is still under probation).
In which circumstances may an employer dismiss an employee without notice or payment in lieu of notice?
An employer can terminate the employment of an employee for misconduct without making severance payment provided that it has provided three warnings (one verbal warning and two written warnings) to the employee. An employee can only be dismissed only after a further violation is made within 12 months of the third warning, and no notice period is required for the dismissal. In the case of serious offences (as defined in the standard employment contract), an employer can immediately dismiss the employee without any severance payment.Severance pay
Is there any legislation establishing the right to severance pay upon termination of employment? How is severance pay calculated?
The right to receive severance pay upon termination of employment (subject to certain exceptions) is prescribed in Notification 84. The amount of severance pay an employee is entitled to depends on his or her length of service prior to the termination of employment, as follows.
|Length of service
|Total payment (including the 1-month notice period)
|Less than 6 months
|6 months to up to 1 year
|Half a month
|1 year to up to 2 years
|2 years to up to 3 years
|3 years to up to 4 years
|4 years to up to 6 years
|6 years to up to 8 years
|8 years to up to 10 years
|10 years to up to 20 years
|20 years to up to 25 years
|More than 25 years
Are there any procedural requirements for dismissing an employee?
The standard employment contract stipulates the circumstances and the mode of termination of employment. An employer can terminate the employment of an employee for misconduct without making severance payment provided that it has provided three warnings (one verbal warning and two written warnings) to the employee. An employee can only be dismissed only after a further violation is made within 12 months of the third warning. In the case of serious offences (as defined in the standard employment contract), an employer can immediately dismiss the employee without any severance payment.
In both of the above-mentioned cases, the employer must notify the relevant township labour office of the dismissal of the employee.Employee protections
In what circumstances are employees protected from dismissal?
Generally, an employee cannot be dismissed without severance payment unless he or she commits a serious offence. Employees cannot be dismissed without following the procedure set out in the standard employment contract in the event of a violation of a normal offence.Mass terminations and collective dismissals
Are there special rules for mass terminations or collective dismissals?
There is no specific legislation covering mass terminations or collective dismissals in the enacted labour laws. The standard employment contract provides that terminations owing to redundancy should be coordinated with a representative of the labour organisation and a representative of the workplace coordination committee, or, in the absence of a labour organisation, directly with the workplace coordination committee.Class and collective actions
Are class or collective actions allowed or may employees only assert labour and employment claims on an individual basis?
Both individual and collective (including class) actions are allowed with respect to employment claims.
The Settlement of Labour Disputes Law defines an individual dispute as a rights dispute between the employer and one or more workers relating to the existing law, rules, regulations and by-laws, collective agreement or employment agreement.
A collective dispute is defined as a dispute between one or more employers or employer organisations and one or more labour organisations over working conditions, the recognition of their organisations within the workplace, the exercise of the recognised rights of their organisations and relations between the employer and the workers, where the dispute could jeopardise the work operation.Mandatory retirement age
Does the law in your jurisdiction allow employers to impose a mandatory retirement age? If so, at what age and under what limitations?
There are no statutory or legal restrictions against employers imposing a mandatory retirement age.
May the parties agree to private arbitration of employment disputes?
Although there is nothing in the law that restricts the parties from agreeing to a private arbitration of employment disputes, employees will, nevertheless, still have recourse to the dispute resolution mechanism provided for under the Settlement of Labour Dispute Law, regardless of the outcome of a private arbitration.Employee waiver of rights
May an employee agree to waive statutory and contractual rights to potential employment claims?
Although there are no express restrictions in the labour laws against employees agreeing to waive their statutory and contractual rights to potential employment claims, it is unlikely that the relevant township labour office would allow or uphold such a waiver in practice, unless the waiver was provided in the context of a settlement reached in an employment dispute in which the settlement payments have already been received by the employee.Limitation period
What are the limitation periods for bringing employment claims?
There is no limitation period prescribed in the Settlement of Labour Disputes Law for bringing employment claims generally. However, Item 7 of Schedule I of the Limitation Law stipulates that the limitation period for suits for wages of a household helper, artisan and labourer is one year from the date when the wages were due.
Update and trendsKey developments of the past year
Are there any emerging trends or hot topics in labour and employment regulation in your jurisdiction? Are there current proposals to change the legislation?
There were no new proposals in the past year to change the legislation in Myanmar. However, in 2016, the Ministry of Labour, Immigration and Population published a draft Foreign Workers Law that sought to regulate the employment of foreign nationals in Myanmar. This bill has not yet been submitted to Parliament, and there have been no further developments thus far.