Many Thai and international companies have expanded rapidly into Myanmar in recent years, in what had seemed to be an unstoppable expansion of cross-border trade resulting from the country's emergence back onto the global stage. For those companies, the COVID-19 situation in Myanmar has been a cause for much concern and uncertainty—doubly so for those who had hired staff in the jurisdiction, as a lack of clarity regarding their obligations as employers was compounded by a lack of information on the situation on the ground.
While the outbreak in Myanmar looked like it was under control earlier this year, a resurgence—many times stronger than the first wave—has struck in recent months, and Myanmar's recorded cases now number in the tens of thousands, with over 1,100 deaths.
For employers faced with this situation, staying up-to-date with the legal landscape is critical. Since the first reported case of COVID-19 in Myanmar, on March 23, 2020, the Myanmar government has been watching the situation closely and issuing notifications and preventive guidelines. Employers who understand what these guidelines mean for their employment relationships, as well as how to stay compliant with current employment-related legislation during these challenges, can decrease the risk of employment disputes or other problems that may arise.
General Employment Regulations
In Myanmar, there is no single regulation governing employment relationships. Rather, employment is governed by written legislation and practices of township labour offices and the Department of Labour (DOL) under the Ministry of Labour, Immigration and Population of Myanmar.
For companies with more than five local employees, employment agreements must follow the employment contract form (ECF) prescribed by the DOL, while the employees themselves must be registered with their respective township labour office. The Social Security Law 2012 also requires employers (again, with more than five employees) to contribute to the state-run social security fund by withholding 2 percent of the employee's total monthly wages and contributing an additional amount equal to 3 percent of the employee's monthly wages (making a total contribution of 5 percent) to the social security fund. Moreover, the minimum wage for all businesses with ten or more employees, as announced by the National Minimum Wage Committee in 2018, is set at MMK 600 (THB 15) per hour, and MMK 4,800 (THB 120) for an eight-hour workday.
In regard to termination of employment, employers must follow the standard termination requirements set out in the ECF, which allows for termination either by mutual agreement with the employee or by providing the employee with at least one month's prior notice and valid reasons for termination, in addition to the applicable severance payments. These payments vary depending on the length of the employee's service and are forfeited if the employee has committed misconduct (a narrowly defined term that employers should be cautious in using).
Occupational Safety and Health
To combat the renewed threat of widespread COVID-19 transmission, the Ministry of Health and Sport made two announcements in late September requiring all employees of organisations and companies to work from home, except for employees of essential businesses such as financial services, food production, medical supplies, and so on.
During this time, employers also need to be especially mindful of the country's Occupational Safety and Health Law 2019, which governs all aspects of health and safety and lays out employers' duties and responsibilities. These include arranging medical check-ups for employees to ensure that they are not suffering from any occupational ailment; providing employees with sufficient personal protective clothing, materials, and facilities (and seeing that they make use of them); and distributing occupational safety manuals, health manuals, and guidelines to raise employees' awareness of health and safety measures.
Employers are also obligated to report any suspected outbreak of COVID-19 to the appropriate health officer, as Myanmar has defined COVID-19 as a communicable disease under the Prevention and Control of Communicable Diseases Law 1995. In addition to instituting this reporting requirement for suspected occurrences of communicable diseases, the law also authorises health officers to carry out investigations to prevent an outbreak and to order persons suspected of infection to undergo quarantine at home—violations of which may lead to fines and imprisonment.
Contingencies and Disputes
There is no change to the termination formalities for COVID-19-related contingencies (such as the measures to mitigate the financial impact of layoffs or workforce reductions seen in some other jurisdictions). The requirement of one month's notice prior to termination still applies, and employers may not cite the crisis as justification for foregoing or reducing severance payments. However, it does appear that serious impact on the business from the COVID-19 outbreak would be a valid reason for the termination itself.
In establishments with more than 30 employees, workplace coordinating committees must be established to promote good employer-employee relationships and coordinate with any labour organisation that may exist at the workplace. Each workplace coordinating committee consists of three individuals nominated by the labour organisations or employees, along with three people nominated by the employer. The committee hears individual disputes, oversees negotiations between parties, and conducts its own negotiations on collective employment dispute matters, such as disputes over employment conditions, general welfare, or salary payment. Although this requirement pre-dates the COVID-19 crisis, any disputes that arise as a result of it should still be referred to the relevant committee.
In employment disputes, including those arising as a result of the COVID-19 outbreak, the workplace coordinating committee will have the chance to reach a solution within five days, after which the matter will be escalated to the township conciliation body. If the township conciliation body cannot reach a settlement within three more days, it will refer the dispute to the regional or state arbitration body for settlement, which will reach a decision within seven days and will communicate this decision within a further two days. If a party is not satisfied with the decision, they may either submit the dispute to the arbitration council, or a lockout or strike may be carried out in accordance with the law.
Having a clear grasp of Myanmar labour law, along with an awareness of the steps that the Myanmar government has taken to deal with the crisis, can help employers make informed decisions about the best strategy for their business to navigate through the crisis and to thrive in what the management consulting firm McKinsey calls the “next normal.” This can seem especially daunting in Myanmar, where ongoing legal reforms are continuing in tandem with the government's crisis response. However, for those with a firm grounding in the latest labour-related laws and regulations and a legally compliant human resources plan, long-term success is within reach.
Author: Nada Songsasen, Consultant, Tilleke & Gibbins. Please send any comments or questions about the content of this article to Zac Robinson at firstname.lastname@example.org.
Series Editor: Christopher F. Bruton, Executive Director, Dataconsult Ltd, email@example.com. Dataconsult's Thailand Regional Forum provides seminars and extensive documentation to update business on future trends in Thailand and in the Mekong Region.