Employers reduce workers’ benefits as junta requires additional daily allowance

The Myanmar junta has mandated paying minimum wage workers 1,000 kyat in addition to their daily earnings, but factory employees and labour rights advocates in Yangon say that the increase has been accompanied by cuts to their benefits.

The 1,000-kyat pay rise is equivalent to US $0.48 at the exchange rate set by the junta, but would be closer to half this value at the black market rate.

Some factories have reportedly been paying workers at a daily rate of 5,600 kyat (US $2.67 at the junta rate)—an increase from the previous minimum of 4,800 kyat (US $2.29)—since the middle of 2023, while reducing some benefits and demanding more output from their workforces.

On October 9, the junta-controlled National Committee for Designating Minimum Wage announced that instead of a minimum wage increase, workers earning 4,800 kyat a day would receive an added daily stipend of 1,000 kyat, making 5,800 kyat per day in total.

According to three labour affairs groups, many employers have not complied with the new requirement.

“The factories that are now paying 5,800 kyat now used to pay 5,600, so if they pay an additional 1,000 a day, they should be paying 6,600. But instead, they just subtracted the previous pay increases,” said Ei Phyo, joint secretary of the Federation of General Workers Myanmar (FGWM).

A letter from the junta-controlled labour ministry, which communicated the new allowance requirement to employers, had a stamp but no signature, which some employers used as a pretext not to pay the required additional 1,000-kyat daily stipend to each worker.

“There is no signature, so [they said] it is not a direct order and are grasping at technicalities,” Ei Phyo said.

Other employers have taken this as an opportunity to reduce overtime pay and have stopped paying commute compensation or weekly bonuses, according to FGWM.

According to labour advocacy organisation Action Labor Rights (ALR), daily productivity quotas have also increased in some of the factories that are paying 5,800 kyat a day.

“There is still a gap between what the workers are asking for and what they are able to give. What the workers are asking for is 7,000, 8,000, or 10,000 for an eight-hour work day. 5,800 a day doesn’t cover even basic living costs,” said Yangon-based ALR spokesperson Thurein Aung.

The Sun Apparel Myanmar garment factory in Hlaingthaya (Hlaing Tharyar) Township, which makes clothes for the German sportswear company Jako, has reportedly complied with the new minimum wage but with little improvement in conditions for workers as a result.

Employees at that factory initiated protests for higher wages than the minimum of  4,800 kyat a day this year, and ultimately received a pay increase of 800 kyat (US $0.38). To comply with the junta order, there has been an additional increase of only 200 kyat, according to a female worker employed at the factory for about one year.

Two labour leaders at Sun Apparel who had organised for improved working conditions and higher wages were arrested in June and not released until September.

In October 2022, labour union members at a factory making clothes for Adidas in Yangon’s Shwepyitha Township led a strike for the first time since the coup, calling for a minimum daily wage of 8,000 kyat per day.

While the employers did not meet the strike participants’ demands, workers at other factories also began to demand higher wages, leading to a number of dismissals and arrests.

Under the Thein Sein administration, the minimum wage for 8 hours of work was set at 3,600 in 2015. Under Aung San Suu Kyi’s National League for Democracy administration, it was set at 4,800 in 2018.

According to the minimum wage law, the minimum wage is scheduled to be adjusted every two years, but after the increase in 2018, it remained unchanged for five.

By law, the regime-run National Committee for Designating Minimum Wage and representatives for both employers and employees are supposed to set the minimum wage together. However, workers’ representatives and labour advocacy organisations that used to take part are now boycotting the process in protest against the coup.

SOURCE: https://myanmar-now.org/en/news/employers-reduce-workers-benefits-as-junta-requires-additional-daily-allowance/