In Myanmar, the labor law acknowledges two primary types of employment agreements: Individual Employment Contracts and Collective Bargaining Agreements.

Individual Employment Contracts

Individual Employment Contracts are the most prevalent type of employment agreement. They are formed between a single employee and an employer. The Ministry of Labour, Immigration and Population (MLIP) has established a mandatory employment contract form that all employers with more than five employees must use. This standardized contract outlines core terms of employment. While the core elements are pre-determined by the MLIP format, employers can add supplementary details in designated appendices to address specific job descriptions and company policies.

Collective Bargaining Agreements

Collective Bargaining Agreements are established between a group of employees, often represented by a labor union or organization, and an employer. These agreements address broader working conditions and benefits that apply to all employees covered by the agreement. Collective bargaining agreements are less common in Myanmar compared to individual contracts. However, they are becoming increasingly recognized as labor unions gain traction.

Myanmar law requires certain details to be included in employment agreements to ensure clarity and protection for both employers and employees. These essential clauses are based on the Employment and Skills Development Law (ESDL) 2013 and Ministry of Labour pronouncements.

Basic Employment Information (ESDL Section 5(b))

The agreement should specify the type of employment, whether it's full-time, part-time, temporary, or fixed-term. It should also state the contract term, indicating the duration of employment, whether it's for a definite or indefinite period.

Compensation and Benefits (ESDL Sections 42-49)

The agreement should clearly state the employee's base salary, payment frequency, and any allowances provided. It should detail the calculation method and rate for overtime work exceeding standard hours. It should also specify annual leave, sick leave, maternity leave, and other forms of leave offered, adhering to minimum legal requirements.

Work Schedule and Conditions

The agreement should define the standard workweek, daily working hours, and rest days. If applicable, it should outline any meal arrangements provided by the employer during work hours.

Termination Clauses (ESDL Sections 58-69)

The agreement should explain the grounds for termination with cause and the required notice period or severance pay. It should also outline the employee's notice period for resignation.

While non-compete clauses are unenforceable, employers can include confidentiality agreements to protect sensitive information. Consider outlining a mechanism for resolving workplace disagreements, such as internal procedures or mediation. Employers can add supplementary clauses specific to their business needs, as long as they comply with Myanmar's labor laws.

The probationary period is a crucial phase in the employment process in Myanmar, serving as an initial assessment phase for both employers and employees. It allows employers to evaluate an employee's suitability for the role and their fit within the company culture. On the other hand, employees can assess if the job aligns with their expectations and skillset. Myanmar's labor laws provide a framework for incorporating probationary periods into employment agreements.

Key Points Regarding Probation in Myanmar

• Maximum Duration: The Employment and Skills Development Law (ESDL) 2013 restricts the probationary period to a maximum of three months. Employers are not obligated to include a probationary period in the contract.

• Employer Obligations During Probation:

  • Employers must provide at least 70% of the employee's base salary during the probation period.
  • Employers should clearly outline performance expectations for the probationary period.

• Termination During Probation:

  • Employers have more flexibility to terminate an employee's employment during probation, provided one month's advance written notice or one month's salary in lieu of notice is provided. They are not legally required to furnish a reason for termination.
  • Employees can resign with a minimum of seven days' written notice during probation.

Benefits of a Well-Defined Probation Period:

• Reduced Mismatches: A structured probation period allows for early identification of any unsuitability, minimizing time and resources invested in the wrong candidate.
• Performance Evaluation: Probation offers a chance for employers to assess an employee's skills, knowledge, and work ethic.
• Employee Onboarding: A well-defined probation can incorporate aspects of onboarding, ensuring new hires receive the necessary training and support to succeed in their roles.

Important Considerations:

• While employers have more leeway during probation for termination, they should ensure their actions comply with broader principles of fairness and non-discrimination enshrined in Myanmar's labor laws.
• Probationary periods should be clearly outlined in the employment contract, including the specific start and end dates.

Incorporating a well-structured probation period into employment agreements allows both employers and employees in Myanmar to navigate the initial phase of employment with greater clarity and reduced risk of misunderstandings.

In Myanmar, the legal landscape regarding employment contracts presents unique considerations for confidentiality and non-compete clauses.

Non-Compete Clauses: Unenforceable in Myanmar

According to the Myanmar Contract Act (1872), post-employment restraints on trade are restricted. This means that non-compete clauses, which prevent employees from working for a competitor or starting their own competing business after leaving a company, are unenforceable in Myanmar courts.

Implications for Employers:

Employers who wish to protect their confidential business information or client base cannot rely on non-compete clauses to restrict employee mobility after termination.

Confidentiality Clauses: A Viable Option

While non-compete clauses are void, Myanmar law does allow employers to include confidentiality clauses in employment agreements. These clauses can restrict employees from disclosing confidential information about the company, its trade secrets, or client data to unauthorized individuals or entities.

Enforceable Parameters for Confidentiality Clauses:

• Specificity: The confidentiality clause should clearly define what constitutes confidential information.
• Reasonable Scope: The restrictions on disclosure should be reasonable in terms of time period and scope of information covered.

For example, a confidentiality clause could restrict employees from sharing client lists or proprietary formulas for a specific period after leaving the company. However, it cannot prevent them from using their general skills and knowledge gained during employment.

Importance of Well-Drafted Clauses:

To ensure enforceability, confidentiality clauses should be carefully drafted by legal counsel familiar with Myanmar employment law. Clear definitions, reasonable restrictions, and adherence to Myanmar's contractual principles are crucial.