What Myanmar law says
The Employment & Skills Development Law (ESDL) 2013 limits severance entitlement to confirmed employees with at least 6 months of continuous service who are terminated by the employer for any lawful reason other than gross misconduct. Probationers, resigning employees, fixed-term staff whose contract simply expires, and employees dismissed for documented gross misconduct are not entitled to severance. The schedule itself is in Notification 84/2015 (or its successor).
Who is entitled and who is not
| Scenario | Severance owed? |
|---|---|
| Employer-initiated termination, 6+ months tenure | Yes |
| Redundancy / restructure | Yes |
| Mutual separation | As agreed (typically yes, often higher) |
| Probation termination (≤ 3 months) | No |
| Resignation | No |
| Gross-misconduct dismissal (documented) | No |
| Fixed-term contract expiry | No |
| Retirement | Per contract / company policy |
| Death in service | Per contract / SSB survivors' benefit |
Categories of employee covered
- Local staff — covered.
- Foreign staff on a Myanmar employment contract — covered.
- Part-time / fractional staff on an indefinite contract — covered, severance pro-rated.
- Independent contractors — not covered (no employer-employee relationship).
- Directors on payroll — covered if they meet the ESDL definition of employee.
What if there's a dispute
- Township labour office first — common dispute is the employer denying severance for an employee with 7 months tenure.
- Conciliation Body — formal conciliation under the Settlement of Labour Disputes Law.
- Arbitration Council — final binding step. Statute of limitations: typically 6 months.
Employer takeaway
Test every separation against three questions: (1) Did the employer initiate? (2) Is tenure 6+ months? (3) Was the ground anything other than gross misconduct? If yes to all three, pay severance per Notification 84/2015. Run final settlement within 7 days of last working day. Withhold PIT, deregister from SSB within 30 days, and keep records for at least 7 years.
Edge cases and unenforceable clauses
- Forced resignation — if the employee was pressured, may be reclassified as employer termination.
- Constructive dismissal — see constructive dismissal.
- Misconduct without documentation — risks reclassification as termination without lawful grounds.
- See severance calculation.
Common entitlement mistakes
- Treating mutual separation as resignation to avoid severance.
- Denying severance for tenure just past the 6-month threshold.
- Categorising performance termination as gross misconduct without evidence.
- Misclassifying employees as contractors to avoid severance.
We publish practical, legally-grounded HR guidance for Myanmar employers. Each piece is reviewed by our compliance team against current MLIP and Labor Law requirements.