Legal and Institutional Reforms for Improved Labour Market Governance in Myanmar:

1. Legal and Institutional Reforms for Improved Labour Market Governance in Myanmar: ILO’s Strategy for Support under the Initiative 29 September 2016 Natsu Nogami Senior Legal Officer ILO Liaison Office in Myanmar

2. Background • Myanmar opening up and engaging in international community after decades of isolation • A number of major reforms have been introduced and continuing: i.e. • transition from military rule to democracy • release of political prisoners • amendment of labour laws • promotion of foreign investment, etc • Strong economic performance

3. However….1 • Weak social development • Its industrial competitiveness is so far based on low wages: i.e. factor-driven economy • Manufacturing sector hampered by poor infrastructure, lack of access to capital, limited skills, high costs of starting and running a business. • High incidence of the informal economy (i.e. Decent Work deficits) • 1.1 million child labourers (aged 5 to 17) (Sources for the last two bullet points: MOLIP, Labour Force Survey 2015)

4. However….2 • Investment climate suffers from disputes which are mostly attributed to: • Absence of professional dispute settlement services • Weak and incoherent legal and regulatory framework • Lack of awareness and understanding of law • Weak enforcement and compliance • Alleged discrimination and retaliation against union leaders • Strikes action should be available as a means of last resort, but often becomes a means of first resort in the absence of functioning legal remedies for workers • Industrial actions (i.e. strikes and lock-outs) that do not follow legal procedures Labour market reform overdue and considerable

5. There is a need of: • An integrated programme of support, with strong laws • Strong and sustained economic growth requires a solid foundation in laws and regulations governing labour market • Current legal uncertainty, not only legal weakness, will necessarily hamper further economic and social development • Complemented by sound industrial relations • Support to wage-setting institutions (minimum wage and collective bargaining) and dispute settlement machinery can: • increase productivity • ensure distribution of wealth; and • reduce inequality (between rich and poor, between formal and informal economy, etc)

6. ILO’s strategy for support under the Initiative Objective: Improve labour market governance through legislative and institutional reforms Pillar 1: Cohesive and responsive labourlaws that are based on social dialogue and in line with International Labour Standards Pillar 3: Capacity building for social partners Pillar 2: Capacity building for labour market institutions Gender mainstreaming strategies

7. Pillar 1: Cohesive and responsive labour laws that are based on social dialogue and in line with International Labour Standards

8. Current Myanmar labour laws: fragmentation • There is no central piece of labour law defining and providing minimum standards for the employment relationship. • The existing labour laws are obsolete and fragmented: • Sector-based (e.g. factory, shops and establsihments, mines, etc) or • theme-based (e.g. payment of wages, leave and holidays, etc).

9. Fragmentation of labour laws: Implications • Application gap: i.e. • Total exclusion of certain categories of workers from the legal protection (e.g. “homeworkers”); or • Partial coverage: e.g. • domestic workers are recognized and covered only under the Labour Organization Law but not by any other labour laws; • labour inspectors do not have the jurisdiction in construction or agriculture where there is high volume of workforce and prevalence of accidents and injuries. • Lack of legal clarity could lead to unnecessary disputes which could otherwise be preventable

10. Goals for Labour Law Reform • Comprehensive: covers all workers and employers and leaves no unintended “gaps”; • Accessible: laws can be easily understood by all stakeholders. This will help to prevent unnecessary disputes resulting from ambiguous rules; • Appropriate: in light of Myanmar’s history, present conditions and vision for near future; and • Consistent: with national policy goals, ILO commitments, and international labour standards (Original slide: Aaron Halegua, ILO consultant 2015)

11. Three-phased approach to labour law reform • Phase I:Amendment of individual laws based on MOLIP priorities (ongoing): • Employment and Skills Development Law • Labour Organization Law (LOL) • Settlement of Labour Disputes Law (SLDL) • Phase II: Establishment of a Labour Standards Act (in 2-3 years) • Phase III: Consolidation of LSA and other existing labour legislation into a Labour Code (in 4-5 years)

12. Phase I: Amendment of priority laws • Employment and Skills Development Law (2013) • Employment contract – major debates on mandatory employment contract • Employment promotion and skills development – demand is high but the law is insufficient • Labour Organization Law (2011) • Restrictions on the formation of organizations of employers and workers – serious threat to freedom of association • Anti-union discrimination – also serious threat to FOA • Settlement of Labour Disputes Law (2012) • Collective bargaining – no provisions to promote it. • Workplace Coordinating Committee (WCC) – currently not established or ineffective • Dispute settlement procedures and institutions – lengthy and complicated procedures; capacity and legitimacy of the institutions questioned • Enforcement, penalties, compliance and rule of law

13. Phase II: Labour Standards Act:What will it look like? • Many important questions will soon be answered: • What topics will be covered? • Employment contracts; working hours and leaves and holidays; wages; labour inspection; penalties, etc? • Special categories of workers: children, maternity, domestic workers, etc? • Fundamental principles and rights: discrimination, pay equity, sexual harassment, forced labour, child labour, freedom of association and right to collective bargaining? • Relationship with the existing labour laws (i.e. OSH law, industrial relations law, social security law, etc)? Phase III: Cohesive and consolidated Labour Code

14. Pillar 2: Capacity building for labour market institutions to develop coherent laws and promote compliance and application • Enhanced capacity of labour inspectors to improve compliance with labour laws that respect International Labour Standards • Better functioning, more responsive Labour Dispute Settlement system; • Better functioning, balanced and efficient wage-fixing institutions; • Partnership with the Parliament in the legislative process

15. Pillar 3: Capacity building for employers and workers to engage in labour law reform and build sound industrial relations • Support to develop their positions on legislative amendments in line with the International Labour Standards • Support to raise awareness and build capacity on sound industrial relations: i.e. • labour law advisory services to their members • collective bargaining • representation and assistance in dispute settlement • legal compliance and rule of law

16. Legislative Process: • National Tripartite Dialogue Forum (NTDF), established in 2015: • Is a venue for tripartite consultation and decision-making on labour-related policies and legislation • Labour Law Reform Cluster • Established under the Employment Opportunities Sector Working Group • Myanmar government ministries, foreign governments, research institute, international development banks, chamber of commerce, employer representatives, etc. • Engagement with the legislative body, with a view to enhancing their capacity to ensure that the law is balanced and in compliance with the International Labour Standards

17. Legislative Process: Wider stakeholder engagement and consultation • Annual Stakeholders Forum on Labour Law Reform and Institutional Capacity Building (we are here today) • A venue for the Myanmar tripartite partners to engage with international investors, development partners and civil society representatives on its ongoing reform efforts; • Receive their inputs and feedback; • Enhance constructive relationships among domestic and international stakeholders; and • Inform progress