Corrections & Recommendations
for VLCA Findings
CV Form
CV Form is the first point to assess how the employer is managing recruitment and employment. Questions in CV Form must not probe into irrelevant personal information. A written undertaking of the worker is usually attached to and saved along with the CV Form. Terms and conditions stated in those written undertaking usually demonstrate practices that are not in compliance with the law.
The question for pregnancy should not be included in the CV Form.
Questions that have unwanted connotation or implication of discrimination should not be included in the CV Form.
Question about SSB registration should be included in the CV Form because registered period and contribution months can be carried from one work to another.
Undertaking or Terms and Conditions of Employment
Almost every factory requires new worker to sign on a written undertaking or terms and conditions of employment, which is then attached to or saved along with the CV Form in the worker's personal file. These written undertaking or terms and conditions often include the points that are not in compliance with the law. For example, the following points, not limited to, must not be included and practiced.
"The new worker must not take casual leave during probation period." See also ...
"The worker must work overtime if it is needed."
By signing the Employment Contract, the worker has committed to working normal working hours, 8 hours a day and 44 hours a week. Therefore, the worker has no contractual obligation to work overtime except by their free consent."If the worker was absent for 2 continuous days, he/she must receive warning letter."
It can be seen as double punishment as the worker would receive a warning and have their wages deducted."Only if the new worker worked at least 10 days, their salary will be calculated and paid."
Such a requirement is not in compliance with the law.etc.
Employment Contract
The Employment Contract (EC) must be signed within 30 days after the employer has appointed the worker to do any work. However, this clause shall not to apply to employing permanent worker in government departments and/or organizations.
If a training period and/or the probation period was designated before the start of employment, the worker during those periods shall not be subject to the requirements specified in Subsection (1).
---> Section 5(a)(1)(2) of The Employment and Skill Development Law
It is legal obligation to sign the Employment Contract with the worker after the employment.
The employer must prepare three copies for the worker: one for the employer, one for the worker and one for the relevant government office.
The employer and the worker must sign on all copies of the contract.
The employer must obtain signature of acknowledgement from the relevant government office and provide one copy of the contract to the office.
It is also contractual obligation to provide one copy of the contract to the worker.
It is recommended to obtain the worker's signature upon receipt of their copy of contract.
Form 7 (Employment Card)
The employer must send the original labour card taken from the new worker to the relevant government department and seek an employment card (Form-7) in return. However, it is understandable that many factories nowadays don't practice seeking Form-7s any more because .....
It is strongly recommended to seek From-7s from the relevant government department or to consult with the chief officer of the relevant township department and follow the instruction of the chief officer.
Warning and Undertaking Letters
The worker must receive a warning letter for committing minor offense for the first time and second time, and must sign an undertaking letter for committing minor offense for the third time. Every subsequent offense must occur within 12 months after the previous one.
---> Paragraph 15(b)(2) of The Employment Contract
The type of labour dispute that is largest and challenging to resolve is dismissal. Therefore,
it is strongly recommended to follow the disciplinary steps exactly such as first, second, third and forth (dismissal), and ensure that every subsequent offense occurs within 12 months after the previous one.
it is important to note that the worker must be warned by letter, not verbally, for the first time committing minor offense.
it is recommended to issue the warning letters and undertaking letters with the proper titles, such as
ပထမအကြိမ် စာဖြင့်သတိပေးခြင်း
ဒုတိယအကြိမ် စာဖြင့်သတိပေးခြင်း
တတိယအကြိမ် ဝန်ခံကတိလက်မှတ်ထိုးခြင်း
it is recommended to include a history of disciplinary actions taken against the worker in the second warning letter and the third time undertaking letter. For example, the date and description of first offense should be mentioned in the second warning letter and, the dates and descriptions of the first and second warnings should be mentioned in the third time undertaking letter.
Dismissal
The employer must issue an official letter, providing a concrete reason, singed by the employer or employer's responsible person to terminate employment of the worker. The employer is solely responsible for termination or dismissal of the worker.
Section 15(b)(1) of The Employment Contract
It is recommended to ensure that the disciplinary steps of the first warning, second warning and third undertaking were followed, and every subsequent offense occurred within 12 months after the previous one.
It is recommended to do office work such as issuing official dismissal letter and keeping the records.
It is recommended to be aware of that dismissals are likely to result in disputes.
Given the volatility and unpredictability of gaining orders in the current situations, it is understandable that many factories are now opting to use Temporary Daily Workers to complete urgent and short term orders. However no business circumstances can make the employer legally absolved if the fundamental rights of the workers had been violated. See more...
Leave refers to earned leave (annual leave), casual leave, medical leave and maternity leave. See more...
Medical Leave, Maternity Leave and SSB Benefits
For workers who are registered with Social Security Board (SSB), wages for those medical and/or maternity leave days are provided by both the employer and SSB benefits. The employer is responsible for paying 40% and SSB benefits cover 60% of wage for medical leave and, the employer is responsible for paying 30% and SSB benefits cover 70% of wages for maternity leave.
---> Paragraph 7(c)3&4 of The Employment Contract
---> Section 23-28 of The Social Security Law
While the SSB benefits are cash payment that the registered worker has to wait 2-3 months for, the stipulations of medical and maternity leaves in the Employment Contract state that employees should simply be allowed to take those leave days with basic wage. Therefore, the practices vary from one factory to factory.
It is recommended to allow employees to take medical and maternity leave days with 100% basic wage in their current salary.
If it is not practiced, it is recommended, at least, to pay 40% for medical leave and 30% for maternity leave from the employer side in current salary without making the worker wait for SSB benefits.
If choosing one between medical and maternity leave to pay 100% basic wage in current salary between medical and maternity leaves, it is recommended to go for medical leave.
30 Minutes Rest Time before more than 1 Hours OT
The period of continuous working hours for adult workers on each working day must not exceed 5 hours. No worker shall be permitted to work more than 5 hours without a minimum 30-minute break.
---> Section 63 of The Factory Act 1951
It is a common finding in most factories that the workers work for more than 5 hours continuously without break as they do not want to take their rest time, even if the employer has set the rest time, after afternoon 4 hours of a working day and before more than 1 hour overtime because most workers opt to go back home early. Therefore, it has become a widely accepted issue or minor finding in the view of inspectors or auditors.
It is strongly recommended to get the all workers' agreement signatures for not taking break through the Workplace Coordination Committee (WCC)'s collective agreement.
It is just for your knowledge and not recommended that some factories manage 10 working hours (8 normal working hours + 2 overtime working hours) by splitting into 2 segments of 5 hours each with a lunch break in between. It is, of course, in compliance with the law but not recommended because the workers would be very hungry during last hour of morning's 5 continuous working hours. It is not ideal from a labour welfare perspective.
Resign Salary
If the worker was dismissed, their due wages shall be paid within two working days after the date of dismissal. If the worker resigned by making prior notice, their due wages shall be paid on the last day of relevant payment period. If the worker died, their due wages shall be paid to their legal successor within two working days after the death of the worker.
---> Section 4(d)(e)(f) of The Payment of Wages Law
It is called "Resign Salary" and usually a common finding point in every factory that the worker who quitted the job by whatever means is to be paid only on the day specified by the factory. It maybe because turn over rates in manufacturing factories are high and most workers quit the job by 3 continuous absent days while the worker has contractual obligation to make at least 1 month prior notice.
---> Paragraph 15(b) of The Employment Contract
It is legal obligation to pay due wages on the last day of payment period if the worker resigned by making prior notice.
It is recommended to manage to be able to pay due wages within two working days if he/she resigned by 3 continuous absent days.
SSB Contribution and Registration
SSB contribution is 5% of the worker's salary. 2% is deducted from the worker's salary, while 3% is paid by the employer.
---> Chapter 5 of the Social Security Rules
Deduction of 2% from the worker's salary should be calculated based on the number of days worked. Some factories deduct same amount, usually 2880 MMK, from the salary of all workers, including the new workers who have only worked 10-15 days in the first month. This leads to an unfair burden on the worker, as they are paying more than their quota.
Deduction of SSB contribution must be consistent for all workers, starting from their join date.
It also seems that not deducting 2% from the salary of a resigned worker salary has become an industrial practice.
The employer, in any business with 5 or more workers, must register a new worker with SSB within 10 days after the beginning of employment.
---> Directive No. 5/2014, dated 19th May 2014
If the new worker has been registered with SSB—it is including employment injury benefits for which the employer is responsible for paying 1% of worker's salary—the employment injury benefit may be enjoyed without requirement of how many months of contribution and registered period.
---> Secion 180 of The Social Security Rules
In case of a new worker who suffered employment injury during probation period, the employment injury benefits may be enjoyed without restriction on the period of contribution, if he/she has been registered with SSB. Therefore, the following recommendations should be followed:
inform the relevant SSB office of new workers list every month and register them with SSB starting form their join dates.
deduct SSB contribution based on the number of working days of the new workers starting form their join dates.
Payslip, Payroll, Salary Table
Payslips, payrolls, and/or salary tables are significant documents to verify compliance with the provisions of wage payment, minimum wage calculation, overtime calculation, working hours, etc.
The payslip must be written in Myanmar language and provided to the worker along with their salary.
The payroll or salary table should be written in English and should include the following column titles such as for example:
Worker's Name
Worker ID
Join Date
Basic Salary Rate (Daily Wage)
Working Days
Rest Days and Holidays
Leave Days with Wage
Leave without wage
Absent Days
Total Days with Wages
Basic Salary
OT Rate
OT Hours
OT Payment
Position Bonus
Attendance Bonus
Production Bonus
Gatepass Deduction
SSB Contribution
Take-home Pay
Workplace Coordination Committee - WCC
In any business with 30 or more workers, the employer must establish a Workplace Coordination Committee (WCC) consisting of three employer representatives and three worker representatives. In the event that one or more unions exist in the workplace,
the worker representatives must be from the union or unions if the number of union members is below 50% of the total number of workers, or
half of the worker representatives must be from union or unions and half must be elected if the number of union members is 50% or above of the total number of workers.
the number of employer representatives must be equal to the number of worker representatives.
The formation of the WCC is a significant point of audit regarding workers' involvement and freedom of association, the employer must properly arrange an election and keep document records.
It is recommended to check the video at https://youtu.be/5cPg0cdYeQs for easy and quick formation of WCC.
It is legal requirement that the employer must inform the relevant government office of the names of members of WCC which has been established.
---> Chapter 2 of The Settlement of Labour Dispute Law
---> Chapter 2 of The Settlement of Labour Dispute Rules
It is recommended to hold regular monthly meeting of the WCC to address actual workplace issues.
It is the first legal step in the labour dispute resolution process that any labour dispute must be resolved within the WCC before proceeding to Township Conciliation Body (TCB).
---> The practice of Township Conciliation Bodies is already in place and the procedure is expected to be included in the next amendment of The Settlement of Labour Dispute Rules.It is recommended to obtain the signatures of the workers' agreements reached through WCC meetings and collective agreements, for work-related issues such as the lack of a 30 minute rest time before more then 1 hour overtime.
Suggestion Box
A suggestion box is a simple yet powerful tool that fosters a culture of innovation, problem-solving, and employee engagement. It provides employees with a platform to share their ideas, concerns, and suggestions, unlocking valuable insights that can contribute to continuous improvement.
In a garment factory, the suggestion box plays a dual role—not only in receiving suggestions but also in addressing employee complaints. It serves as a key component of the grievance mechanism and stands as one of the most essential channels for voicing or submitting complaints. Implementing an effective suggestion system ensures that employees feel heard, promoting transparency and building trust between workers and management.
Requirements for the suggestion box system:
the factory must have established a functional suggestion box system whether it is integrated into the grievance mechanism or operated independently.
the factory must have established and maintains set of relevant documents such as policies and procedures.
the suggestion box must be placed at a private area such as near toilets and must not be within view of CCTV cameras to ensure confidentiality.
the procedures for handling suggestions, including how frequently the box is opened and how the letters are processed, must be clearly displayed on the wall next to the suggestion box.
Records of the suggestion letters and the corresponding actions taken must be thoroughly maintained.
etc.
Premium Rate for Working Overtime (OT Rate)
The premium rate for overtime pay for a worker earning the minimum wage rate (4800) is simply double the hourly rate (600x2=1200). For the worker earning above the minimum wage rate (4801 or above), the overtime pay shall be calculated using the prescribed formula (((daily_rate*6)/44)*2).
---> Letter No. 0224/1/AhLaNya(ဒေညှိ)2018(29721), dated as 14-5-2018
---> Letter No. 130/1/AhLaYa-Law/2018(638)
---> Order of Labour Department in 1965, dated as 6th December 1965
Pay an overtime rate of 1200 to the worker earning the exact amount of minimum wage rate of 4800.
Pay an overtime rate calculated by the prescribed formula to the worker earning above minimum wage rate of 4800.
For example, the overtime rate for a worker earning a daily rate of 5000 MMK must be calculated as follows;
5000*6=30,000
30,000/44=681.81
681.81*2=1,363.62
So then, the OT rate is 1364 per hour. The example provided is for daily workers. Different fomulas apply for salary and piece-rate workers, respectively.
Occupational safety and health is an important area of conducting VLCA (Voluntary Labour Compliance Assessment). See more .....
Deductions for Late and Gate Pass
The employer may deduct wages for any period of absence from work, except for leave days that are entitled to wages under the relevant law and public holidays.
---> Section 7(a) of The Payment of Wages Law
The employer may deduct from wages for violating any terms or conditions stipulated as fines in the employment agreement.
---> Section 11(b) of The Payment of Wages Law
Many Factories practice deducting from wages for late arrival and gate pass. If doing so, the following recommendations should be followed or considered.
The practice of the deduction should be based on the Section 7(a) of The Payment of Wages Law which follows the principle of No-Work-No-Pay.
If the deductions are made in accordance with the principle of "No-Work-No-Pay", the amount of the deduction must be proportionate to the worker's wage rate.
For example, amount of deduction for 1 hour late or gate pass must be 600 MMK if the worker is earning 4800 MMK per day.If the deductions are made as fines for violating workplace rules or, terms or conditions stipulated in the employment contract:
---> Section 11 of The Payment of Wages Lawthe rules or, terms or conditions must had been stipulated in the employment contract or agreement.
approval of the relevant government department must be obtained in advance for how much deduction will be made for what kind of violation of workplace rules or, terms or conditions.
the approval of the relevant government department must be displayed on noticeboard and/or at public area.
money deducted from wages as fines shall be used for only the workers' benefits in coordination with the legally registered labour organization in the factory.
Extra Allowance 1000/- MMK starting from 1st Oct 2023
According to the Notification No. 2/2023, issued on 9th October 2023, daily extra allowance 1000/- MMK must be paid in addition to regular daily wages for all working days, leave days and holidays in accordance with the 1951, Leave and Holiday Act. The paragraph No. 3 of the notification says "ထို့အပြင် ၂၀၂၃ ခုနှစ်၊ အောက်တိုဘာလ ၁ ရက်နေ့မှစ၍ အပိုထောက်ပံ့ကြေး ၁,၀၀၀/- ကျပ် (တစ်ထောင်ကျပ်တိတိ) ကို အလုပ်လုပ်သောရက်များနှင့် ၁၉၅၁ ခုနှစ်၊ ခွင့်ရက်နှင့် အလုပ်ပိတ်ရက် အက်ဥပဒေအရ ခံစားခွင့်ပြုရန် ဖြစ်သည်။".
Extra Allowance 2nd 1000/- MMK starting from 1st Aug 2024
According to the Notification No. 1/2024, issued on 9th August 2024, daily extra allowance 1000/- MMK must be paid additionally on top of regular daily wage plus previous extra allowance 1000/- MMK for all working days, leave days and holidays in accordance with the 1951, Leave and Holiday Act. The paragraph No. 4, 5 and 6 of the notification says:
၄။ ၂၀၂၄ ခုနှစ်၊ ဩဂုတ်လ ၁ ရက်နေ့မှစ၍ လက်ရှိထောက်ပံ့လျက်ရှိသည့် အပိုထောက်ပံ့ကြေးကျပ် ၁၀၀၀/- အပြင် ထပ်မံ၍ ကျပ် ၁၀၀၀/- ကို အပိုထောက်ပံ့ကြေးအဖြစ် အလုပ်လုပ်သောရက်များနှင့် ၁၉၅၁ ခုနှစ်၊ ခွင့်ရက်နှင့် အလုပ်ပိတ်ရက်အက်ဥပဒေအရ ခံစားခွင့်ပြုရန်ဖြစ်ပါသည်။
၅။ ဤသတ်မှတ်ချက်သည် အလုပ်သမား ၁၀ ဦးအောက်ရှိ လုပ်ငန်းငယ်များ၊ မိသားစုတစ်ပိုင်တစ်နိုင် လုပ်ငန်းများနှင့် သက်ဆိုင်ခြင်းမရှိစေရ။
၆။ အနည်းဆုံးအခကြေးငွေသတ်မှတ်ရေးဆိုင်ရာ အမျိုးသားကော်မတီ၏ ၉-၁၀-၂၀၂၃ ရက်စွဲပါ အမိန့်ကြော်ငြာစာအမှတ် (၂/၂၀၂၃) ကို ဤ အမိန့်ကြော်ငြာစာဖြင့် လွှမ်းမိုးပယ်ဖျက်လိုက်သည်။
So, daily wages rate is now 6800/- MMK (4800 + 1000 + 1000)—Minimum Wage + First Extra Allowance + Second Extra Allowance.
See: Unofficial translation and News of Global New Light of Myanmar