7 things you may want to know about the Myanmar labour market governance reform

Myanmar is undergoing a labour market (governance) reform which will culminate with an improved labour law framework. We have asked members of the Government, as well as employers’ and workers’ representatives, development partners and members of the civil society to tell us more about how reforming the labour market and its regulations are going to contribute to Myanmar’s development and prosperity.

Feature | 05 February 2018

How can good labour market governance facilitate reduction of poverty and inequality, attract foreign direct investment and contribute to exports?

U Thein Swe, Union Minister of Labour, Immigration and Population of Myanmar

We consider that the labour market reform plays a key role in achieving the Sustainable Development Goal 8 - “Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all.” Among others, we are implementing a number of important initiatives aimed at fostering skills development, providing assistance to small and medium enterprises, as well as creating more jobs through increasing and facilitating foreign direct investment (FDI). We are also prescribing relevant laws such as the Foreign Workers Law and the Investment Law. In a bid to ensure safe migration and protect migrants, we have also just opened a Migrant Resource Center and Complaint Mechanism Center at Yangon International airport, and appointed Labour Attaches in our diplomatic missions to Thailand, Malaysia and the Republic of Korea.

Moreover, for an effective labour market reform, we need to find a proper balance among meeting the needs of employers and workers, strengthening job security, improving social protection and extending social security coverage, and promoting social dialogue. We also need to ensure peace at the workplace and reduce labour disputes through amendment and implementation of the Settlement of Labour Disputes Law (2012).

Lastly, in order to assess and improve the current labour administration and industrial relations system, we have recently developed a Decent Work Country Programme (DWCP) for 2018-2021 with the technical assistance of the ILO. The implementation of the DWCP will require a holistic approach, where all relevant ministries, as well as representatives of employers’ and workers’ organizations will work together to improve the labour and industrial relations landscape of Myanmar. 

How are current labour law reform initiatives contributing to Myanmar’s journey to reach its full development potential?

Natsu Nogami, Chief Technical Advisor, ILO Myanmar

To achieve strong and sustained economic growth, it is important to have solid foundations in the laws and regulations governing the labour market. Legal weaknesses could lead to disputes and strikes, and the legal uncertainty could hamper the growth of businesses and investment. The labour law reform, as agreed by the Myanmar stakeholders, should create a new legal system which is:
  • comprehensive - covering all workers and leaving no unintended “gaps”;
  • accessible  - easily understood by all stakeholders, including workers, employers, labour inspectors, mediators, arbitrators and judges, which will help to prevent unnecessary disputes resulting from ambiguous rules;
  • appropriate vis-à-vis Myanmar’s history and present conditions; and
  • consistent with Myanmar’s commitment to implement  international labour standards generally.
By achieving these goals through the ongoing labour law reform process, Myanmar will be able to develop a labour market which balances the growth of business and investment on the one hand, and the sharing the generated wealth with the workers and their families on the other hand.

What are the major challenges and major achievements of the labour law reform in Myanmar so far?

U Tun Tun, Committee member, Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI)
The most important accomplishment has been the development of the relationship between social partners and the tripartite dialogue structures in Myanmar. These structures, and the relationships which underpin them, are the foundation for successful industrial relations in Myanmar. We believe that this foundation will help promote decent work and sustainable enterprises in Myanmar, benefitting workers, employers and the country.

The biggest challenge we are facing is the knowledge and capacity of workers, employers and their organizations. There are thousands of employers and millions of workers, most of whom lack familiarity with Myanmar law and international standards. Employer organizations and trade unions similarly are facing many challenges and working hard to build capacity so that they can more meaningfully contribute to the labour law reform process, but these efforts are a long-term challenge.

What is the role of freedom of association in labour market governance?

Ms. Phyo Sandar Soe, Assistant General-Secretary of Confederation of Trade Unions of Myanmar (CTUM)

Labour market governance is important for the political, economic and social development of Myanmar and comprises four key elements: 1) Policy and regulatory framework; 2) Labour administration (such as vocational and skills training, and labour inspection); 3) Sound industrial relations; and 4) strong social dialogue.

Although the 2008 Myanmar Constitution guarantees democratic rights, many of the 33 million people of working age, do not fully understand what democracy is and do not know how to practice it. In this regard, trade unions and employers’ organizations play a vital role, because it is within these organizations that people learn and exercise democratic principles. Currently, there are only 300,000 trade union members in Myanmar, and very few employers’ organizations. Freedom of association should be strengthened and further promoted by the government for the benefits of both trade unions and employers’ organizations, so that these 33 million people of working age can effectively understand and practice democracy and their right to freedom of association.

Freedom of association is also important for economic and social development. If employers’ and workers’ organizations are not developed enough or not strong enough, they will not be able to nurture constructive dialogue. We all know that we cannot attract foreign investors to countries where industrial relations are not stable. We need to develop stable industrial relations, which in turn increase productivity of individual companies and ultimately of a country as a whole. Most people in Myanmar assume that it is the workers’ responsibility to increase productivity. However, it is a shared responsibility between employers – through technology and capital – and workers – through their labour. A good collective bargaining system will increase productivity and also ensure a  fair distribution of productivity gains and income, as well as a reduction of inequality in the country. Therefore, the right to collective bargaining should be guaranteed and an effective mechanism to promote it should be set up in the labour market governance.  

Freedom of association and the right to collective bargaining are at the heart of the trade unions’ role to promote democracy and social equality. It is also very important for effective labour market governance as it supports the development of peaceful industrial relations. Collective bargaining contributes to the political, economic and social development of a country. If employers and workers work together, we can achieve sustainable development.

What are the key elements of the roadmap for the labour market reform in the 12 months ahead?

U Myo Aung, Permanent Secretary of the Ministry of Labour, Immigration and Population of Myanmar (MOLIP)

The representatives of the Government, employers and workers have endorsed a 5-point roadmap for the labour market reform in the 12 months ahead at the National Tripartite Dialogue Forum (NTDF) held on 16 January 2018 in Nay Pyi Taw. The NTDF is the highest-level national consultative body which advises the Government on all matters that concerns employment and labour. The Roadmap was developed in alignment with the Initiative to Promote Fundamental Labour Rights and Practices in Myanmar, as well as the Decent Work Coutry Programme for Myanmar. Its overall objective is to improve labour market governance through a cohesive labour law framework that is based on social dialogue and International Labour Standards. It aims to achieve the following 5 main outcomes by January 2019:
  1. Identify key pieces of labour legislations after tripartite dialogue and amend them based on social dialogue and International Labour Standards.
  2. A Labour Code or Labour Standards Act will be drafted, based on social dialogue and International Labour Standards;
  3. Strengthened capacities for sound industrial relations and dispute settlement at national, region/state, township, sectoral and enterprise levels. This will be done primarily through the establishment and implementation of a national or sectoral training curriculum on industrial relations;
  4. The National Tripartite Dialogue Forum will have become a permanent and operational body; )
  5. Technical Working Group on Communications will have been established and operational under the NTDF, to develop and implement communications strategies for labour market reform.

How can responsible practices by international business contribute to improving labour market governance and compliance with international standards?

Ms. Vicky Bowman, Director, Myanmar Center for Responsible Business (MCRB)

International companies who are either invested in, or buying from Myanmar, above all should familiarize themselves and comply with Myanmar law, and help their employees and business partners to do so. Where there are gaps in Myanmar law, or standards are insufficient, they should be guided by international standards of responsible business conduct such as those of the ILO Multinational Enterprises and Social Policy (MNE Declaration), the OECD Guidelines for Multinational Enterprises and related Guidances and the UN Guiding Principles on Business and Human Rights. One thing that companies can do is arrange social audits of their suppliers in line with these international standards, and then support them with training and advice on areas where they need to improve their practice. 

Another thing international companies should do is be ‘responsible buyers’, not chopping and changing on orders, or deadlines, so that their suppliers can manage their workers without resorting to forced overtime.  It’s also important to develop long-term supplier relationships so that suppliers can plan for a long-term workforce. They should also collaborate and share information with others in the sector, for example by collaborating on supplier assessments so as to reduce audit fatigue by local companies.

Finally, since they have practical knowledge of other countries’ legal frameworks and international standards, international companies should do as much as they can to provide feedback to the government, including through the tripartite dialogue process on the Labour Law Reform, to help improve Myanmar labour law and make it more robust and competitive.

How can the international community help Myanmar in reforming its labour law and improve industrial relations?

Mr. Andreas Magnusson, European Union Delegation to Myanmar

The power to reform and develop the Myanmar labour market is in the hands of Myanmar itself. International partners can share their experiences, offer support, advise and examples of best practices from abroad. A number of development cooperation programmes are currently being carried out by international partners in Myanmar, with the objective of supporting labour rights in the country. Some are sectorial, such as support in certain labour-intensive sectors, like the garment industry. Others are aimed at fundamental reforms, such as efforts to revise the labour legislation or improve the capacity of essential actors, i.e. labour inspectors or trade unions.

The experience of the labour initiative partners is that the process of creating a functioning labour market requires inclusiveness. This means reforming labour legislation on the basis of a functioning tripartite dialogue. Important decisions regarding labour rights need ownership by credible representatives of both employers and employees as well as governmental leadership. International partners can offer examples on different models of this process, to inspire further reform in Myanmar.