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Applied Labour Law Quick Facts by MGMAemp

Employment
  • The list of persons selected for employment must be submitted to the Employment and Labour Exchange Office, and Employment Registration Card (Form 7) must be obtained.
  • If an employer appoints a worker to perform any job, an employment contract must be signed within 30 days.
Employment Restrcition Act 1959, Section (1), (2), (3)
Employment and Skill Development Law, 2013, Section 5(a)
Age-Related Restrictions
  • No child under the age of 14 shall be required or permitted to work in any factory.
  • No young person shall be employed in work that is hazardous, harmful to health, interferes with the opportunity to receive education, or adversely affects morality and dignity.
  • “Young person” means a child or an adolescent. “Child” means a person who has attained the age of 14 but has not yet attained the age of 16, and who is certified by a registered medical practitioner as fit to work. “Adolescent” means a person who has attained the age of 16 but has not yet attained the age of 18.
  • A person who has attained the age of 14 but has not yet attained the age of 16 may work as a child worker if he or she has obtained a certificate from a registered medical practitioner stating that he or she is fit for work. However, such child shall not be required or permitted to work for more than a total of 4 hours in any day, nor between 6:00 PM and 6:00 AM. A register/book for child workers must be maintained.
  • A person who has attained the age of 16 but has not yet attained the age of 18 shall be deemed to be an adult if he or she has obtained a certificate from a registered medical practitioner stating that he or she is fit to work as an adult.
The Factories Act 1951, Chapter (8)
Minimum Wages
  • No worker shall be paid wages lower than the prescribed minimum wage. Higher wages may be paid.
  • If the wage stipulated in an employment contract is lower than the prescribed minimum wage, such provision shall be void.
  • No person shall violate the provisions set out in the Minimum Wage Order/Notification.
Minimum Wage Law, 2013
Payment of Wages
  • If the number of workers exceeds 100, wages must be paid within 5 days after the end of the wage period.
  • When an employee’s employment is terminated, any wages due must be paid within two working days.
  • If an employee resigns in advance, the wages must be paid on the day the wage period ends.
  • If a worker dies, any wages due to them must be paid within two working days after their death.
  • All wages shall be paid only on working days.
  • If, due to unforeseen exceptional circumstances, including natural disasters, there are difficulties in paying wages within the specified time, the employer shall, with the agreement of the workers, submit a justified explanation to the Department stating the rescheduled date on which wages will be paid.
Payment of Wages Law, 2016, Section (2), (4) and (5)
Deduction from Wages
  • Except for paid leave entitled under the relevant law and public holidays, deductions may be made from wages for periods during which the employee does not work.
  • Deductions may be made for accommodation and transportation costs, food expenses, electricity charges, and water fees arranged and provided by the employer, as well as income tax payable by the worker and any overpaid wages made in error.
  • At the request of the worker, deductions may be made from wages for advance payments, expenses paid on behalf of the worker, savings for the worker, or any statutory contributions.
  • Deductions may be made from wages in accordance with the decision of a court, the arbitration body, or the arbitration council.
  • According to the above provisions, when making deductions from wages, the total amount of all deductions—other than those arising from the employee’s failure to perform duties—shall not exceed 50% of the employee’s wages.
  • A penalty deduction may be made for compensation of any material or financial loss directly resulting from the employee’s intentional negligence, carelessness, dishonesty, or failure to perform duties.
  • A penalty deduction may be made for any violation by the employee of workplace rules specified in the employment contract that include stipulated fines.
  • When deducting compensation or fines, no deduction shall be made from wages without giving the employee an opportunity to explain or defend themselves.
  • When deducting compensation or fines, no more than 5% of the monthly wage shall be deducted in a month.
  • The compensation penalty shall not exceed the value of the damage or loss.
  • Prior approval must be obtained from the Department regarding the manner in which compensation deductions will be made.
  • No deduction shall be made from workers under the age of 16 as a penalty under any circumstances.
Payment of Wages Law, 2016, Chapter (3), Section (7), (8), (9), (10), (11)
Work Hours
  • The working hours shall be 8 hours per day and 44 hours per week. In the case of continuous operations, the working hours shall be 48 hours per week.
  • No employee shall be required to work continuously for more than 5 hours without being given at least a 30-minute rest break.
  • The total of work hours and rest time (excluding overtime) shall not exceed 10 hours.
The Factory Act, 1951, Chapter (7), Section (59), (63), (64)
Overtimes
  • Overtime wages shall be calculated and paid at twice the basic wage, or in accordance with the prescribed formula.
  • Prior approval must be obtained from the Department with the consent of the workers.
The Factory Act, 1951, Chapter (7), Section 73(1)
Employment Contract Template (Notification No. 140/2017), Paragraph (8)
Workplace Coordination Committee (WCC)
  • In any enterprise employing 30 or more workers, the employer shall establish a Workplace Coordinating Committee for labor affairs to enable discussions and reach collective agreements.
  • If there is a labor organization and its membership accounts for 50% or more of the workers, each labor organization shall nominate three worker representatives, and an equal number of employer representatives shall be appointed.
  • If there is a labor organization and its membership is less than 50% of the workers, the number of worker representatives shall consist of representatives from the existing labor organizations plus an equal number of representatives from non-union workers, and an equal number of employer representatives shall be appointed.
  • If there is no labor organization in the enterprise, it shall be formed with three worker representatives elected by the employees of that enterprise and three employer representatives.
  • A representative member of the Workplace Coordinating Committee must be at least 21 years of age.
  • A worker representative must be a permanent employee of the relevant enterprise and have at least six months of service.
  • An employer representative must be a person who is responsible for management of the relevant enterprise.
Settlement of Labour Dispute Law, 2012, Chapter (2)
Settlement of Labour Dispute Rules, 2012, Chapter (2)
Weekly Rest Day
  • If the statutory weekly working hours have been completed under the relevant law, the worker is entitled to at least one weekly rest day with pay or basic salary.
  • If work is performed, an alternative rest day that is not a public holiday must be granted within three days before or three days after. If such a substitute rest day is provided, overtime pay shall not be applicable.
  • If work is performed on a weekly rest day, overtime pay must be provided.
  • If the weekly rest day is taken as leave, that weekly rest day shall be treated as a leave day. The weekly rest day shall not be eligible for substitution or rescheduling to another day.
Leave and Holiday Rules, 2018, Chapter (2), Section (3), (5), (7)
Payment of Wages Rules, 2013, Rule 43(g)
Public Holiday
  • Public holidays annually announced by the Union Government through official notification shall be granted with full pay or salary.
  • If work is performed on a public holiday, the worker shall be entitled to twice the normal basic wage or salary rate. In addition, if a scarcity allowance is being received, it shall also be payable for that day at the usual rate.
  • If a public holiday coincides with a weekly rest day or another public holiday, it shall not be rescheduled or substituted with another day as a public holiday.
  • If a public holiday is taken as leave, that public holiday shall be treated as a leave day.
Leave and Holiday Act, 1951, Section (3) |
Leave and Holiday Rules, Rule (22)
Earned Leave
  • A worker who has completed 12 consecutive months of service shall be granted, within the following 12 months, 10 consecutive days of leave with average wages or average salary.
  • For each month in which 20 days of work have not been completed, one day shall be deducted.
  • If mutually agreed by both the employer and the employee, it may be accumulated for up to three years and granted at any time.
  • For the period of earned leave, the relevant wage or salary shall be paid in advance before the leave begins, either to the employee or to a representative authorized by the employee.
  • If an employee resigns or is dismissed before taking leave, the wage or average salary for the leave shall be calculated and paid within two working days. In the event of death, it shall be paid as soon as possible.
  • Any public holidays falling within the period of earned leave shall be counted as part of the earned leave.
Leave and Holiday Act, 1951, Section (5) |
Leave and Holiday Rules, Rule (36)
Casual Leave
  • With pay or salary, a worker is entitled to a total of six days of casual leave per year.
  • Except when traveling long distances by land or water, or in cases of special religious or customary obligations, casual leave shall not be taken for more than three days at a time.
  • Casual leave shall not be combined with any other type of leave.
  • If not taken within the relevant year, it shall lapse.
  • Casual leave shall be applied for using the prescribed leave application form. If the employee is unable to attend work for any reason, they may inform the leave through telephone, telegram, or other means. Upon returning to work after the leave period, the employee must complete and submit the prescribed leave application form.
Leave and Holiday Act, 1951, Section (5) |
Leave and Holiday Rules, Rule (30)
Medical Leave
  • A worker shall be entitled to sick leave with pay or salary for a period not exceeding 30 days per year, upon submission of a medical certificate.
  • A minimum of six months of service is required. If six months of service have not been completed, the leave may be taken without pay.
  • It may be combined with earned leave. If not taken within the relevant year, it shall lapse.
Leave and Holiday Act, 1951, Section (6)
Maternity Leave
  • It must be requested with a medical certificate issued by a registered medical practitioner, or by a doctor recognized by the Social Security Board.
  • A total of 6 weeks before childbirth and 8 weeks after childbirth shall be granted as maternity leave with pay or salary. Maternity leave may be taken in conjunction with sick leave.
  • Fifteen days of paternity leave shall be granted.
Leave and Holiday Act, 1951, Secion 7(a) |
Leave and Holiday Rules, 2018, Rule (46)
Social Security Law, 2012, Section (25), (26), (27), (28)
Social Security
  • If the number of employees meets or exceeds the prescribed minimum threshold, it shall be subject to mandatory registration under the social security system and the provisions relating to social security benefits.
  • A total contribution of 5% of the employee’s wages (3% by the employer and 2% by the employee) shall be paid as contributions.
  • The total contribution shall not exceed 15,000 kyats.
  • The social security system and benefits currently being implemented are as follows:
    - Health and Social Care Insurance System (medical leave, maternity leave, etc.)
    - Family Assistance Insurance System (scholastic stiphend benefit, health care and aid, suitable benefit)
    - Employment Injury (medical treatment, temporary/permanent disability benefit, survivor benefit)
Social Security Law, 2012, Chapter (5), (6) | Social Security Rules
Dismissal
  • Termination of employment must be carried out only after proper records have been maintained for valid reasons and, through an official order, signed by the employer or an authorized representative, and duly served to the employee.
  • In accordance with the existing laws, rules, and regulations, the employer may terminate employment by giving one month’s prior notice and paying the prescribed compensation.
  • Minor Offence (Annexe - A)
    - Warning letter for first and second time of offenses
    - Sign undertaking letter for third time of offense
    - Immediate dismissal without severance payment (compensation) for forth time of offense
  • For minor offenses, if 12 months or more have passed between incidents, the record shall be treated as starting anew from the first instance.
  • Major offense (Annexe - B), immediate dismissal without severance payment (compensation)
  • Termination compensation for dismissal not due to any fault or misconduct of the employee, but due to other reasons, shall be paid in accordance with Notification No. 84/2015 dated 03-07-2015.
    - service 6 months - 1 Year = 0.5 month salary
    - service 1 - 2 years = 1 month salary
    - service 2 - 3 years = 1.5 months salary,
    - service 3 - 4 years = 3 months salary
    - service 4 - 6 years = 4 months salary
    - service 6 - 8 years = 5 months salary
    - service 8 - 10 years = 6 months salary
    - service 10 - 20 years = 8 months salary
    - service 20 - 25 years = 10 months salary
    - service over 25 year = 13 months salary
Employment Contract Template, Paragraph 15(b)