When is severance not payable in Myanmar?
Severance is not payable in Myanmar in five scenarios under the Employment & Skills Development Law (ESDL) 2013: probation termination (under 3 months), employee resignation, fixed-term contract expiry, employees with under 6 months continuous service, and employer dismissal for documented gross misconduct. Notice and leave encashment are usually still owed.
What Myanmar law says
The Employment & Skills Development Law (ESDL) 2013 and Notification 84/2015 set out five distinct scenarios where severance is not payable. In every other employer-initiated termination of a confirmed employee with at least 6 months service, severance applies. Importantly, even in the no-severance scenarios, the employer typically still owes outstanding wages, leave encashment, and (where applicable) notice or pay in lieu.
The five no-severance scenarios
| Scenario | Severance owed? | Other amounts owed |
|---|---|---|
| Probation termination (≤ 3 months) | No | 2-week notice + leave encashment + outstanding wages |
| Employee resignation | No | Outstanding wages + leave encashment + notice (if employer waives) |
| Tenure < 6 months | No | Notice + leave encashment + outstanding wages |
| Fixed-term contract expiry | No | Outstanding wages + leave encashment |
| Gross-misconduct dismissal (documented) | No | Outstanding wages + leave encashment (notice may be skipped) |
What counts as gross misconduct
- Theft, fraud, or embezzlement.
- Violence at work.
- Serious breach of duty (e.g., disclosing trade secrets).
- Repeated, documented insubordination after warnings.
- Falsification of records or qualifications.
The employer must have written warnings and an investigation file to defend the no-severance position at the township labour office.
What if there's a dispute
- Township labour office first — common dispute is the employer claiming "gross misconduct" without evidence.
- Conciliation Body — formal conciliation under the Settlement of Labour Disputes Law.
- Arbitration Council — final binding step. Statute of limitations: typically 6 months.
Employer takeaway
Severance can only be skipped in five tightly defined scenarios — probation, resignation, under 6 months tenure, fixed-term expiry, or documented gross misconduct. In all other employer terminations, pay severance per Notification 84/2015. Even in the no-severance cases, run final settlement (wages + leave encashment + notice if applicable) within 7 days. Issue the relieving and experience letters, deregister from SSB within 30 days, and keep records for at least 7 years.
Edge cases and unenforceable clauses
- Forced resignation — may be reclassified as employer termination at the township labour office.
- Fixed-term renewed multiple times — see fixed-term renewals.
- Probation termination on day 91 — confirmed employee; severance applies.
- See who is entitled to severance.
Common no-severance mistakes
- Calling a performance termination "gross misconduct" without documentation.
- Pressuring an employee to resign to avoid severance — risks constructive dismissal.
- Letting a fixed-term contract roll over silently and then claiming "expiry".
- Withholding leave encashment as a penalty — illegal under the Payment of Wages Law.
- Employment & Skills Development Law (ESDL) 2013 — severance exclusions
- Notification 84/2015 (or current) — severance schedule
- Settlement of Labour Disputes Law — process
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