‘Termination Compensation’ to be approved by year end


Myanmar employers and representatives of employees have determined that the ‘Termination Compensation’ policy will be approved by the end of the year.

The ‘Termination Compensation’ proposal for employees has already been submitted to the Department office of the Ministry of Labour for the Minister’s approval.

“The proposal will not be submitted to the Parliament as it is not a law. We have already discussed the rates and submitted our suggestions to the office of the Ministry of Labour. They are finalizing the Termination Compensation rates. The announcement is expected to come out before the end of the year”, said U Ye Naing Moe, member of the Labour Jury Council (Nay Pyi Daw).

The proposal was confirmed after a meeting between the Ministry of Labour, representatives of the Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI), Chairpersons of Industrial Zones and employees’ representatives. The agreement reached in the meeting was forwarded to the Ministry of Labour.

Public Relation officials of the Ministry of Labour (Nay Pyi Daw) said, “The Termination Compensation will be announced very soon. We have already received the proposal and it will be announced right after the Minister approves it.”

According to the old Termination policy, employees with three to twelve months of service would receive a month’s salary upon termination from employment. Likewise, employees with one to two years of service were entitled to 2 months’ salary and so on.

Employees with 4 or more years of service were entitled to receive 5 months’ salary, which is the maximum compensation. The policy was amended as it is unfair to employees with longer years of service.

The participants of meeting agreed that the amended policy is more progressive compared to the former policy, as compensation can go as high as 10 months’ salary.

“Earlier employees with 10 years of services were unfairly compensated. That is why we discussed the issue continuously with the employers. The new policy includes up to 10 months’ salary as compensation upon termination of employees with long services. The policy is not a law and the Ministry of Labour will approve it and make an announcement as soon as possible”, said U Ye Naing Moe.

“The new policy will apply to all employees. It will be better than the former one”, said U Myat Thin Aung business tycoon and Chairman of the Hlaintharyar Industrial Zone.

U Ye Naing Moe added that employees are paid only for 3 months’ salary or lower when they are terminated. Sometimes they are not compensated at all depending on their job.

The new Termination Compensation policy has taken employees’ job nature, experience and service into account.