Introduction

Myanmar labour law is governed by both old and new laws and regulations, as well as
internal policies and practices of the Department of Labour.

Many of Myanmar’s laws dating back to the colonial period and post-independence
period are, with more or less changes, still in force. Since the country’s political and economic
opening (2011), Myanmar’s government has commenced a comprehensive reform process.
Existing laws were revised or replaced, and new laws enhanced.

Comparing to the labour laws of Myanmar and Thailand, most of the parts like
Registration of contract, employment contract, contract term, probation period, working hours,
overtime, public holidays, leave (causal , earned, medical, maternity and paternity), salary and
minimal wages are not significantly different.

Regarding the resignation and termination, Myanmar’s labour law does provide few
detailed on termination and dismissal of employees. The conditions and requirements for
termination are primarily governed by the policies of the Minisitry of Labour, mostly importantly
the template contract of the Ministry of Labour.

For termination: under the law, an employer is not required to state any reasons for the
termination of an employee by notice. But 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 months’ notice and strong reasons for the termination. Generally,
termination by notices results in severance payments as set out below:
Term of employment Severance amount
<6 months -
6- 12 months 0.5 month’s salary
1 -2 yrs 1 month’s salary
2-3 yrs 1.5 months’ salary
3-4 yrs 3 months’ salary
4-6 yrs 4 months’ salary
6- 8 yrs 5 months’ salary
8 – 10 yrs 6 months’ salary
10 – 20 yrs 8 months’ salary
20 – 25 yrs 10 months’ salary
 25 yrs 13 months’ salary
The rate of severance payment of Myanmar and Thailand are quite different.

For resignation, the employees may resign by giving one month’s notice (after
confirmation) or seven days’ notice during probation period. No severance payment is required.

For 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, second and third warning just
after each violation. After 3rd 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. The employer shall further be
entitled to dismiss the employee in case of a single grave misconduct (e.g physical abuse).
Neither a notice nor the payment of severance payment applies.

Dispute Resolution System

The Settlement of Labour Dispute Law was promulgated in 2012 shortly after the Labour
Organisation Law, which repealed the 1926 Trade Dispute Act. The individual dispute may start
at a workplace coordinating committee, go to the township conciliation body and end at the
competent courts if conciliation is not successful. Collective dispute cases pass through
arbitration processes in addition to negotiation and conciliation such as: the workplace
coordinating committee (negotiation): the township conciliation body (conciliation): the
regional/state arbitration body, the arbitration council, and the tribunal (arbitration).
Industrial Dispute Settlement Mechanism
Social Security

Myanmar implemented a Social Security Fund for employees. Under the law, benefits
will be available for sickness, maternity, death, employment injury, invalidity and
superannuation. Contributions are calculated at 5% of employee’s monthly salary up to a
prescribed ceiling (currently MMK 300,000 per month) and borne by the employers (3%) and
the employee (2%).

In Thailand, the government, employers and employees contribute to the Social Security
Fund. Both employers and employees each make monthly contribution at the rate of 5% of
employees’ wage, while government contributes at a rate of 2.75%.

Applicable and inapplicable are quite the same.

The other Funds are provident fund and employee welfare fund, both of them are not
established yet in Myanmar but some private companies are trying to use.