Labour Law in

Myanmar
March 2016

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MemoLabour Law in MyanmarMarch 2016

A. Regulatory Framework................................................................................................................ 3
I. Relevant Laws (not exhaustive)............................................................................................ 3
II. Relevant Regulations, Rules and Policies (not exhaustive).................................................. 3

B. Social Security............................................................................................................................ 3

C. Registration of Contract.............................................................................................................. 4

D. Employment Terms..................................................................................................................... 4
I. Employment Contract........................................................................................................... 4
II. Contract Term...................................................................................................................... 4
III. Probation Period.................................................................................................................. 4
IV. Working Hours..................................................................................................................... 4
V. Overtime.............................................................................................................................. 5
VI. Public Holidays..................................................................................................................... 5
VII. Leave................................................................................................................................... 5
1. Casual Leave.................................................................................................................... 5
2. Earned Leave................................................................................................................... 5
3. Medical Leave................................................................................................................... 5
4. Maternity and Paternity Leave.......................................................................................... 6
VIII. Salary and Minimum Wage.................................................................................................. 6
1. Salary............................................................................................................................... 6
2. Minimum Wage................................................................................................................. 6
IX. Medical Benefits................................................................................................................... 6
X. Resignation and Termination................................................................................................ 7
1. Termination....................................................................................................................... 7
2. Resignation....................................................................................................................... 7
3. Dismissal.......................................................................................................................... 7
4. Severance Payment.......................................................................................................... 8
XI. Compliance Obligations....................................................................................................... 8
1. Confidentiality................................................................................................................... 8
2. Legal Compliance............................................................................................................. 8
3. Non-Compete Obligations................................................................................................ 8

E. Health and Safety Rules............................................................................................................. 8

F. Dispute Resolution System......................................................................................................... 9

G. Trade Unions& Strikes............................................................................................................... 9

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We set out below an overview of the basic rules and regulations II. Relevant Regulations, Rules and Policies
governing employment matters in the Republic of the Union (not exhaustive)
of Myanmar.
Settlement of Labour Dispute Rules
Minimum Wage Rules as amended 2016

A. Regulatory
Labour Organization Rules
Instructions of the Factories and General Labour Law

Framework
Inspection Department
Ministry of Labour Notification No. 84/2015 on
Severance Payments
Myanmar labour law is governed by both old and new laws and National Minimum Wage Committee Notification No. 2/2015
regulations, as well as internal policies and practices of the Ministry of Labour Notification No. 1/2015 on
Department of Labour. Labour Contracts
Ministry of Labour Template Employment Contract
Many of Myanmars laws dating back to the colonial period and Ministry of Labour Template Work Rules
post-independence period are, with more or less changes, still Ministry of Labour Template Pay Slip
in force. Since the countrys political and economic opening, While some of the Ministry of Labours internal policies, such
Myanmars government has commenced a comprehensive as the template employment contract, are not required by law,
reform process. Existing laws were revised or replaced, and in practice, employers often do not have a choice but to follow
new laws enacted. the prescribed requirements.

In practice, employment relations in Myanmar are however
heavily influenced by the policies and practices of the Ministry
of Labour, Employment and Social Security (Ministry of
Labour). Regulations and notices issued by the Ministry of
Labour and its departments provide for the interpretation of
the existing laws, but also provide for additional requirements
imposed on employers.
Since the Employment and Skill Development Law (2013)
provides that any employment contract must be registered, and
the Department of Labour will often only register the prescribed
template of the Ministry of Labour, employers are in practice
forced to use the published template. Any amendment must be
approved by the relevant township labour office.

I. Relevant Laws (not exhaustive) B. Social Security

Workmans Compensation Act (1923) as amended 2005 Following the enactment of the Social Security Law (2012),
Leave and Holidays Act (1951) as amended 2014 Myanmar implemented a Social Security Fund for employees
Factories Act (1951) as amended 2016 which came into effect on 1 April 2014. Under the law, benefits
Oilfields (Labour and Welfare) Act (1951) will be available for sickness, maternity, death, employment
Employment Restriction Act (1959) injury, invalidity and superannuation.
Income Tax Law (1974) as amended by Union Tax Law 2016
Law Relating to Overseas Employment (1999) The Health and Social Care Fund, Family Assistance Fund
Labour Organization Law (2011) and Injury Fund have been established, funds for invalidity,
Social Security Law (2012) superannuation, survivors, unemployment and other social
Settlement of Labour Dispute Law (2012) as amended 2014 security benefits (such as housing plan) are still pending.
Employment and Skill Development Law (2013)Minimum
Wage Law (2013) With exemptions (as set out in sec. 12 (a) of the Social Security
Payment of Wages Law (2016) Law (2012), e.g. for international organizations), employers of
Shops and Establishment Law (2016) more than four (4) employees are required to register for and
Various sector-specific laws which contain contribute to the Social Security Fund. All other employees and
labour regulations employers may register voluntarily.

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MemoLabour Law in MyanmarMarch 2016
Contributions are calculated at 5 % of the employees monthly
salary up to a prescribed ceiling (currently MMK 300,000 per
month) and borne by the employer (3 %) and the employee (2 %).
Employees covered by and contributing to the Social Security
Fund are entitled to the benefits provided under the Social
Security Law (2012).
C. Registration of
Contract
According to sec. 5 (a) Employment and Skills Development
Law (2013), an enterprise must enter into written employment
contracts with its employees within 30 days of employment.
The employment contract must be approved by and registered
with the relevant employment township labour office within the
stipulated period.
By Notification 1/2015 of the Ministry of Labour, Employment
and Social Security dated 31 August 2015, employers are
further required to use the official template contract published
by the ministry. Numerous international organizations, the
UMFCCI, labour unions and employers have filed petitions
against the template contract, but Notification 1/2015 remains
in effect.
An employer convicted of failing to sign an employment
agreement will be punished with imprisonment for up to six (6)
months or with a fine or with both (sec. 38 Employment and
Skills Development Law (2013)). Employment contracts not
registered with the labour departments may be declared void.
D. Employment Terms
I. Employment Contract
Pursuant to the Employment and Skills Development Law
(2013), every employee shall be employed under a written
employment contract, which shall contain the following
minimum terms:
Type of employment
Probation period
Wage, salary
Location of establishment
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Term of employment
Working hours
Days-off, holidays and leave
Overtime regulations
Meal arrangements during working hours (if any)
Provision of accommodation (if any)
Provision of medical treatment (if any)
Provision of transportation to/from work (if any)
Regulations to be followed by the employee
Termination of employment
In practice, employers are however required to follow the
template contract published by the Ministry of Labour, which
provides for additional terms.
II. Contract Term
The term of a contract is not regulated under the applicable
laws. Pursuant to the practice of the Department of Labour, a
fixed term contract shall however not exceed two (2) years, but
may be renewed for further term(s).
III. Probation Period
While the Employment and Skills Development Law (2013)
provides for the possibility to agree on a probation period, no
further details are stipulated under the law. Pursuant to the
practice of the Department of Labour, the probation period
shall however not exceed three (3) months.
Pursuant to the template employment contract, employees
shall receive a minimum of 75 % of the normal wage during the
probation period.
IV. Working Hours
Business hours and working times are stipulated in various
laws. The general rules are provided in the Shops and
Establishment Law (2016), which provides for six (6) working
days of up to eight (8) hours per day. Pursuant to the law, at
least one (1) day per week shall be granted as paid rest day.
Further, an employee shall be granted a break of at least half
an hour after four (4) continuous hours of work.
Different stipulations are found in sector specific laws, such as
the Factories Act (1951) and the Oilfields (Labour and Welfare)
Act (1951), which provide for 44 hours per week other than
for work which has to be done continuously, in which case 48
hours shall apply.
 Full Moon Day of Thadingyut (end of 1 variable
V. Overtime Buddhist Lent)

Eid al-Adha (announced in 1 variable

Overtime may be carried out by agreement between the
the newspapers)
employer and employee in accordance with the provisions
Deepavali (announced in 1 variable
of the law. Any implementation of a constant overtime policy
the newspapers)
requires permission of the relevant authorities, e.g. the
Factories and the General Labour Law Inspection Department. Full Moon of Tazaungmone 1 variable

National Day 1 variable

Every work in excess of eight (8) hours per day or 48 hours per Kayin New Year Day 1 variable
week is considered overtime. Accordingly, even if an employee
Christmas Day 1 25 December
only works 40 hours per week, the ninth (9th) hour on a working
day would be considered overtime, even if the weekly working
hours do not exceed 48 hours. VII. Leave

Overtime pay shall be calculated as double the basic wage/
salary, to be calculated as follows:
{(monthly salary x 12 months)/52 weeks/44 (or 48) hrs} x 2.
Pursuant to the Shops and Establishment Law (2016), overtime
is limited to a maximum of 12 hours per week, or 16 hours in
cases of special needs. For work on the weekly rest day, the
employee shall further be granted a substitute rest day.
Different stipulations are found in sector specific laws, such as
the Factories Act (1951) and the Oilfields (Labour and Welfare)
Act (1951).
VI. Public Holidays
Myanmar law recognizes various types of leave. Leave is
governed by the Leave and Holidays Act (1951), but additional
rules may apply in accordance with other laws, such as the
Social Security Law (2012) for employees contributing to the
Social Security Fund.
1. Casual Leave
Every employee is entitled to six (6) days of paid casual leave
per year of employment. Casual leave may not be carried
forward to the subsequent year and may not be spent for more
than three (3) consecutive days at a time, except in the case of
religious or compulsory social events (e.g. weddings, funerals).
Casual leave may not be enjoyed in conjunction with any other
type of leave.

Under the Leave and Holidays Act (1951), every employee

shall be granted paid public holidays as announced by the 2. Earned Leave
Government in the Myanmar Gazette. On average, Myanmar
has 26 public holidays per year, depending on the date of the Earned leave may be enjoyed for a minimum of ten (10) days
variable holidays: consecutively or separately per year of employment, provided
the employee has completed twelve (12) consecutive months of
Independence Day 1 4 January
service with a minimum of 20 working days per month.
Union Day 1 12 February

Peasants Day 1 2 March For each month without the minimum of 20 full days of work,
Full Moon Day of Tabaung 1 variable one day may be deducted from the minimum earned leave
Armed Forces Day 1 27 March entitlement.

Maha Thingyan (Water Festival) 10 12 21 April

long holidays
Earned leave may be carried forward and can be accumulated
up to three (3) years.
May Day 1 1 May

Full Moon Day of Kasong 1 variable

Full Moon Day of Waso (beginning of 1 variable 3. Medical Leave

Buddhist Lent)

Martyrs Day 1 19 July Medical leave is governed by the Social Security Law (2012)
for employees contributing to the Social Security Fund and by

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MemoLabour Law in MyanmarMarch 2016
the Leave and Holidays Act (1951) for employees not covered
by the law.
Under the Leave and Holidays Act (1951), employees are
entitled to 30 days of paid medical leave per year, provided that
they have completed six (6) months of service.
Employees covered by the Social Security Law (2012) are also
entitled to 30 days of medical leave (if they have completed six
(6) months of service), but may enjoy additional leave in case
of certain work injuries and illnesses. Theoretically, employees
covered by the Social Security Law (2012) may receive part of
their salary from the Social Security Fund, but in practice, such
medical leave is also granted as paid leave.
4. Maternity and Paternity Leave
Maternity leave is governed by the Social Security Law (2012)
for employees contributing to the Social Security Fund and by
the Leave and Holidays Act (1951) for employees not covered
by the law.
Under the Leave and Holidays Act (1951), employees are
entitled to 14 weeks of paid maternity leave, to be taken
six (6) weeks before confinement and eight (8) weeks
after confinement.
Employees covered by the Social Security Law (2012) are
entitled to similar 14 weeks of maternity leave, but may further
enjoy additional four (4) weeks in case of twins or up to six (6)
weeks in case of a miscarriage (exception: criminal abortion).
Theoretically, employees covered by the Social Security Law
(2012) may receive part of their salary from the Social Security
Fund, but in practice, such maternity leave is also granted as
paid leave.
Male employees covered by the Social Security Law (2012)
may enjoy 15 days of paternity leave after confinement of
their wife.
VIII. Salary and Minimum Wage
While the employer and employee may agree on a wage/salary
in accordance with the provisions of the law, the government
enacted the Minimum Wage Law (2013) and determined a
minimum wage in August 2015.
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1. Salary
Salaries are to be paid at the end of the month or, depending
on the size of the employing enterprise, between 5-10 days
before the end of the month. The employer is permitted and
required to withhold income tax and social security payments.
Other deductions, e.g. for absence, may only be withheld in
accordance with the law.
The law does currently not require any specific bonus
payments, but a one (1) months salary bonus for the Thingyan
festival in April is general practice in Myanmar.
2. Minimum Wage
Minimum wage is prescribed for all enterprises with more than
15 employees.
According to Notification 2/2015, the minimum wage is MMK
3,600 per day for eight (8) hours of work (excluding break time).
For such purpose, the Minimum Wage Law (2013) defines
wage as the basic salary excluding pension and gratuity
payments, social security cash benefits, allowances (for travel,
accommodation, meals, electricity charges, water service
charges and duties, taxes, medical treatment and recreational
purposes) and severance payments.
Per definition, wage also includes bonuses and overtime, but in
practice, overtime payment is not accounted for the calculation
of the minimum wage.
IX. Medical Benefits
Employees covered by the Social Security Law (2012) are
entitled to visit government hospitals. Other employees may
be entitled to benefits under the Workmans Compensation Act
(1923) in case of work injuries, but have otherwise no statutory
right to medical treatment.
In practice, many employers grant medical allowances or
medical insurance (either with local Myanmar insurances,
or international insurances) to their employees, both out
of corporate social responsibility, as well as for employee
retention purposes.
Resignation and Termination

Mutual Agreement Resignation Termination

Grave Misconduct Oral Warning Other Reasons

Written Warning

Written Undertaking

One Month Notice Immediate Immediate One Month Notice

No Severance Severance

X. Resignation and Termination 2. Resignation

Myanmars labour laws does provide few details on termination
and dismissal of employees. The conditions and requirements
for termination are primarily governed by the policies of the
Ministry of Labour, most importantly the template contract of
the Ministry of Labour.
Pursuant to the template contract of the Ministry of Labour,
employees may resign by giving one (1) months notice
(after confirmation) or seven (7) days notice during the
Probation Period.
No severance payment is required.

1. Termination
Under the law, an employer is not required to state any reasons
for the termination of an employee by notice. Pursuant to the
template contract of the Ministry of Labour, an employee may
however only be terminated for the reasons specified in the
employment contract or work rules. Even during the probation
period, termination would require one (1) months notice and
strong reasons for the termination.
Generally, termination by notices results in severance
payments as set out below.
3. Dismissal
An employee who violates the terms of his contract or the
work rules shall for ordinary misconduct be given a
verbal warning for the first (1.) violation, a written warning
for the second (2.) violation and shall sign an undertaking
for the third (3.) violation. After the third (3.) warning and in
case of further violation, the employer shall be entitled to
dismiss the employee with disbursement of wages remaining
to be paid for days actually worked, but without need to pay
severance payment.

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MemoLabour Law in MyanmarMarch 2016

The employer shall further be entitled to dismiss the employee E. Health and Safety
Rules
in case of a single grave misconduct (e.g. physical abuse).
Neither a notice nor the payment of severance payment
applies.
Health and safety rules are primarily governed by the
prescribed Work Rules of the Ministr y of Labour and
4. Severance Payment instructions of sub-departments within the Department of
Labour. Pursuant to the published policies, the following
Employees terminated by notice or without fault (e.g. for measures may apply:
redundancy) are entitled to severance payments as follows:
Precautions against occupational hazards and creation of
Term of Employment Severance Amount
< 6 months - a healthy and hygienic work environment;
Provision of protective gear and respective training;
6 months 1 year 0.5 months salary
1 year 2 years 1 months salary Arrangement of escape routes and fire alarms;
2 years 3 years 1.5 months salary Regular cleaning and maintenance (cleaning of the floor
3 years 4 years 3 months salary once per week, painting of internal walls and ceilings once
4 years 6 years 4 months salary per year, redoing enamel paint and varnish once every three
6 years 8 years 5 months salary (3) years);
8 years 10 years 6 months salary Ensuring cleanliness, ventilation, fresh air, temperature
10 years 20 years 8 months salary control, absence of dust and smoke, sufficient lighting;
20 years 25 years 10 months salary Provision of separated and sufficient toilets in clean
> 25 years 13 months salary condition;
Provision of clean drinking water (separated from the toilet
by at least 20ft)
XI. Compliance Obligations Provision of spittoons;
Provision of at least one (1) first-aid box or medical box at
General compliance with the law, as well as business practices every factory, depending on the number of employees;
cannot be taken for granted in Myanmar, and employment Provision of adequate dining room and rest areas for
contracts and company policies should provide for the relevant premises with more than 100 workers;
obligations to be observed by the employees. Provision of a nurse room or clinic with one (1) doctor and
one (1) nurse in full-time attendance for premises with more
than 250 workers;
1. Confidentiality Provision of a nursery for premises with more than 50
female workers;
Employees should be clearly advised of their confidentiality Notification requirement to the social security clinic or
obligations, both during and after the employment. workers hospital with regard to any occupational illnesses
and any suspicion that an occupational illness has occurred,
as well as compliance with the social security clinic or
2. Legal Compliance workers hospital recommendation how to deal with an
occupational illness;
We would strongly recommend the implementation of strict Prohibition of child labour; and
compliance guidelines, not only with regard to bribery of Prohibition of drugs, smoking, using fire, drinking alcohol
officials, but also the acceptance of gifts and invitations and the and chewing betel nuts and gums at the workplace.
handling of donations and sponsoring.
The authorities may carry out inspections to ensure compliance
with the relevant obligations.
3. Non-Compete Obligations

It should be noted, that post-contractual non-compete

obligations are not permitted and void in accordance with the
Myanmar Contract Act (1872).

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F. Dispute Resolution in collective bargaining and assist in the preparation of

System
employment agreements.

Employers shall not impede their workers participation in a

Myanmars labour dispute resolution system is governed by the
Settlement of Labour Dispute Law (2012).
Pursuant to the law, the workplace coordinating committee,
which should be installed in every workplace with more than
30 employees, is the first instance for individual dispute
and competent for negotiations regarding collective dispute
cases. The committee consists of four (4) members, equally
representing the employer and the workers. Grievances should
be negotiated and settled by the committee within five (5) days.
The parties involved in the dispute may then bring the case
to the township conciliation body for conciliation which should
decide within three (3) days. In case of an individual dispute,
any party which is not satisfied with the conciliation may apply
to the competent court.
union, shall not dominate or control the union, and shall grant,
upon recommendation of the executive committee, up to two
(2) days leave for activities in the union.
Employees organized in a labour union may, under certain
conditions, go on strike if the general dispute resolution
mechanisms failed. The requirements for a strike are:
Strike demands must be within the scope of competence
of the union (e.g. higher wages, reinstitution of terminated
workers, adequate overtime payment, etc.);
More than 50 % of the workers must approve the strike;
Township labour organization must approve the strike; and
Permission from the conciliation body must be obtained.
Workers in essential sectors are not permitted to strike.

For cases of collective dispute, the Settlement of Labour Please do not hesitate to contact us for further guidance
Dispute Law (2012) implements two (2) further stages of and information.
arbitration: The regional/state arbitration body (decision within Luther Law Firm Limited
seven (7) days) and the arbitration council which forms a
tribunal (decision within seven (7)/14 days).

Alexander Bohusch

G. Trade Unions&
Rechtsanwalt/Attorney-at-law (Germany)
Luther Law Firm Limited

Strikes
Myanmar
Phone +95 1 230 1609/+95 1 230 1917
alex.bohusch@luther-lawfirm.com
Since 2011, labour unions may be formed at the factory level
if at least 30 workers and at least 10 % of all workers of the
factory approve the formation of the labour union. Umbrella
organizations may be formed at the township, regional and
national level.

The labour unions shall have the right to negotiate and settle
with the employer if employees are unable to obtain and enjoy
the rights contained in the labour laws. They may also demand
re-employment of employees dismissed by the employer if
there is cause to believe that the reasons of such dismissal
were based on labour organization membership or activities, or
were not in conformity with the labour laws.

Further, labour unions have the right to send representatives

to the conciliation body for the settlement of disputes
between the employer and employees; may participate

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MemoLabour Law in MyanmarMarch 2016

Imprint

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50678 Cologne, Phone +49 221 9937 0, Fax +49 221 9937 110,

contact@luther-lawfirm.com

Editor: Alexander Bohusch, Rechtsanwalt/Attorney-at-law (Germany), Luther

Law Firm Limited, Luther Corporate Services Limited, Myawaddy Bank Luxury

Complex, 4th floor, Apt. 401, Bo Gyoke Road cnr. Wa Dan Street, Lanmadaw

Township, Yangon, Myanmar, Phone: +95 1 230 1609/+95 1 230 1917,

Fax: +95 1 230 1353, HP (MM): +95 9 425 0136 00, HP (SG): +65 9 829 1829,

alexander.bohusch@luther-lawfirm.com

Copyright: These texts are protected by copyright. You may make use of the

information contained herein with our written consent, if you do so accurately and

cite us as the source. Please contact the editors in this regard

contact@luther-lawfirm.com

Disclaimer

Although every effort has been made to offer current and correct information,

this publication has been prepared to provide information on recent regulatory

and legal developments in Myanmar only. It is not exhaustive and thus does not

cover all topics with which it deals. It will not be updated and cannot substitute

individual legal and/or tax advice. This publication is distributed with the

understanding that Luther, the editors and authors cannot be held responsible for

the results of any actions taken on the basis of information contained herein or

omitted, nor for any errors or omissions in this regard.

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