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Severance Pay Myanmar law stipulates that severance must be paid to all terminated employees.

The amount the employer must pay depends on the length of service of the employe e. If the employee has worked at the company for less than 3 months, he is entit led to 1 months salary as severance pay. If he has worked for the company from 3 months to 1 year, he is entitled to 2 months salary. If he has worked for the com pany for 1-3 years he is entitled to 3 months salary. And if he has worked for th e company for more than 3 years, the employer must pay 5 months salary. Now there are some caveats to this law. The first is that if the employee willfu lly quits, then no severance pay is required. Also, if the company can prove tha t the employee did something damaging to the companys reputation, the company is not required to pay any severance. These two caveats mean that in reality very f ew employees are fired from Myanmar companies; instead they are pressured to res ign thereby alleviating the companys severance pay requirements. We find this pra ctice to be somewhat morally contemptible, but it is something that foreign inve stors should be aware of. What all this boils down to, is that foreign investors need to be very careful about who they hire, because getting rid of a bad emplo yee is not that easy in Myanmar. Unions The Labor Organization Law (2011), which was written with the assistance of the ILO, should be of particular interest for foreign investors looking at the manuf acturing sector. The law looks similar to many labor laws in other countries and basically gives workers the right to organize. Although this law is officially on the books, currently labor unions have almost no collective bargaining power. When a labor dispute happens, it usually involves workers from a particular fac tory striking against the factorys ownership. These workers do not bring in labor union representatives but instead choose leadership from among their own ranks to negotiate. These kinds of strikes have happened at factories owned by foreign ers mostly Japanese and Korean and most of them have been settled within a short period of time with factory management agreeing to raise wages. Foreign investors looking to capitalize on the low cost of labor in Myanmar will need to understand that strikes may occur in the future and should draft a cont ingency plan to deal with such issues. Because unions are still very weak in Mya nmar, foreign investors would do well to deal directly with their workers and wo rk to resolve any issues before they result in a full-scale strike. Working Hours Depending on the industry, there are a maximum number of hours that employees ca n work before they are required to be paid overtime. Frankly, this law is not ca refully followed in Myanmar, but foreign investors should be aware of it anyway. For factory workers, miners, oil and gas workers, and other blue collar jobs the maximum number of hours per week is 44, with a maximum of 8 hours per day. Anyt hing beyond this will require overtime pay at double the workers normal rate. For white-collar organizations such as media companies, private businesses, shop s and offices, the maximum number of hours per week is 48, with a maximum of 8 h ours per day.