Tag Archives: Employment Law

Mongolia Set to revise Labor Law



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A recent meeting of the Cabinet reviewed and discussed a proposed draft of amendments to the Labor Law. It was decided by the Cabinet that the proposed amendments will be submitted to Parliament to be formalized in law, along with the addition of some proposals from Cabinet members.

The Labor Law was ratified in 1999 and has been amended several times since. The law governs employment relationships within Mongolia. The Law and sets standards as to health and safety requirements, minimum wage levels, maximum hours of work, collective employment agreements and bargaining and resolution of employment disputes. The law prohibits employment discrimination on the grounds of social or property status, race, color or nationality, sex, religion or political views as well as unwritten contracts of employment.

The latest changes introduced via the Amendment Law on 21 April, 2017 provide detailed regulations regarding previously unclear provisions of the Labour Law, such as probationary periods, internship/apprenticeship periods, and part-time employment. The amendment also increased the level of fines for violations of the Labour Law by employers, in order to ensure the protection of employees’ basic rights.

The working group which drafted the current proposed amendments believe that a number of the law’s articles are outdated and don’t meet the needs of the modern labor environment. The newly proposed amendments seek to cover relations between employers and employees, clarifying rights and obligations. The amendments also include articles that would place restrictions on the employment of minors, workplace discrimination, establishing employment agreements without time constraints for permanent employment, part-time employment regulations, remote working regulations, basing salaries on skills and abilities, annual vacation requirements, and new regulations for vacation days for mining sector employees who work far from home for extended periods.

Lehmanlaw Mongolia LLP will be update further progress of the amendments to the Law on Labour in timely.

Issues in Mongolia Employment: Employment of Minors



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Foreign companies operating in Mongolia are sometime surprised regarding local laws on employment of minors. In Mongolia, employment of minors, is legally acceptable under limited circumstances and with high protections required in favor of the young employees.

There are a number of legislations regulating the child employment In Mongolia. There is the Labour Law, as well as The Law on Protection of Child Rights, and the relevant international conventions. Mongolia was one of the first countries to ratify the Convention on the Rights of the Child in 1990. Minimum Age Convention, 1973 (No. 138) and Worst Forms of Child Labour Convention, 1999 (No. 182) were also ratified by Mongolia.

In Mongolia, a person at the age of 16 is allowed to enter into an Employment Agreement.  In addition, a person of age 14-15 years of age may be hired under the consent of the parents or guardians for the purpose of acquiring vocational training or work experience.

However, minors are allowed to be hired only in approved sectors. The Minister in charge of labour issues recently renewed the list of positions at which minors not allow to be employed, namely alcohol, tobacco related, plastics industry, construction, hotel, nightclub, bar, casino gambling, entertainment venue and generally jobs with hazardous labour conditions.

Horse racing, a traditional Mongolian sport, often sees children as young as five riding horses in the races. The children train the horses at even younger ages. Such activities have come under criticism by international child protection organizations for being a hazardous activity for these children, but due to the traditional nature of the sport, it is not likely that it will be restricted.

The employer of a minor is obligated to protect the health of minor employees by providing a medical examination twice a year. Furthermore, it is prohibited to require the minor employees to carry or lift load exceeded the permitted amount, and to work overtime, on public holidays or weekends. Violations may result in fines to the employer in addition to a requirement to compensate the young employee for with.

Mongolian Employers Face Fines for Violation of Employee Rights to Unionize



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We continue our series on the fundamental principles of labor law and the rights of the worker in Mongolia. As explained in a previous post, Mongolia became a member of the International Labor Organization (ILO) in 1969. This membership means Mongolia embraces the fundamental principles embodied in the ILO Constitution and the Declaration of Philadelphia, including the principle of freedom of association.

Ensuring the freedom of association and of collective bargaining is a fundamental principle recognized by Mongolia through the ratification of the Freedom of Association and Protection of the Right to Organize Convention, 1948 (No. 87), and the Right to Organize and Collective Bargaining Convention, 1949 (No. 98) in 1969.

Article 16 of the Constitution of Mongolia guarantees citizens freedom of thought, speech and expression, the right to favorable working conditions, to form a party, association or other public organization on the basis of social and personal interests and opinion, and to hold peaceful assembly. Furthermore, the discrimination and persecution of a person for joining a political party or other associations or for being their member is prohibited under Mongolian legislation.

The Labour Law (1999) sets out relations to be regulated by collective agreement and collective bargaining agreement, who may participate in them, how they shall be conducted and regulations on strike action etc. The Law on the Rights of Trade Unions (1991) deals with forming and joining unions, and prohibits discrimination due to union membership or non-membership. It also sets out the rights of unions and lays out measures to prevent employers’ interference with union activities.

Mongolian legislation provides for the right of employees to form and join organizations of their own choosing and enshrines the right of these organizations to freely organize their activities and formulate their programmes. Free and voluntary negotiation is promoted at all levels between employers or employers’ organizations without the intervention of the public authorities.

The Labor Law prohibits organizing a strike involving employees of organizations responsible for national defense, national security and public order. Public servants in general are entitled to join in unions, but banned from participating in strike action under the Law on Public Service (2002).

In recent years, labour disputes in related to the breach of freedom of association and collective bargaining have been increasing in the mining, industrial and construction sectors in Mongolia. There have been cases in which employees which are terminated due to organizing a trade union or being a member of trade union organize a strike to force collective bargaining.

A company taking action against employees or labour unions, or otherwise in breach of the freedom of association and collective bargaining face Sanctions. Penalties have increased under the newly adopted Law on Infringement and employers risk fines up to MNT 500,000 for violations.

Mongolia Employees and Employers: Know Your Rights



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Mongolia has been a member of the International Labor Organization (ILO) since 1968 and has ratified 20 international conventions of the ILO, including all eight Fundamental Conventions, 2 of the 4 Governance Conventions, and 10 of 77 total Technical Conventions. Of the 20 Conventions ratified by Mongolia, 19 remain in force while 1 has been rescinded.

Through its ratification of all eight of the ILO’s fundamental conventions, Mongolia has recognized the following four fundamental principles and rights of the worker:

  • Ensuring freedom of association:
  • Eliminating child labour
  • Abolishing forced labour
  • Prohibiting non-discrimination in employment.

Recently, Mongolia hosted a National Workshop on International Labour Standards for members of the judiciary and lawyers. The workshop focused on application of labor rules by the courts domestic courts, and was organized in cooperation with the Mongolian Bar Association, the International Training Center of ILO and the ILO Country office for China and Mongolia (CO-Beijing).

Judges, attorneys and government officers participated in the training for 5 days. The training consisted of review of the ILO and international labour standards system, the use of the work of ILO’s supervisory bodies; and discussions as to when and how domestic judges and lawyers can use international labour law to effectively resolve labour disputes. Of key importance was ensuring the relevance of international labour standards in key situations with widespread practical application.

The workshop found that in practice, the international labour standards set out in the various conventions were not widely referred to or implemented by Mongolian lawyers and courts. This is determined to be primarily due to lack of knowledge of many of these professionals as to Mongolia’s ratification of these conventions, and the fact that due to inadequate translation into Mongolian, many professionals were not certain of the actual contents of the conventions.

The workshop focused on the importance training in strengthen participants’ knowledge and skill to effectively utilize these international labour sources to resolve employment and labor issues within Mongolia.  All participants noted that these international labour standards may be used directly to resolve the labour disputes or to interpret a relevant domestic provision to fill a gap and resolve ambiguities in the domestic law.

Proper awareness of and application of these international standards are vital for both Mongolian employees and expatriates working in Mongolia. Expatriate employees in Mongolia are granted equal  legal rights and protections, and should never feel their foreign employer has the upper-hand in cases of unfair termination or discrimination in Mongolia.

Mongolia Company Liquidation: What are Requirements for Employee Termination?



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There are many reasons a company or organization may decide to liquidate. Some liquidations are compulsory, in which case the process occurs as the result of a court order. Other liquidations are voluntary, in which case the people running the organization decide to cease operations. Either way there are formal steps in which you should closely follow. One of one of the key aspects of any company liquidation is termination of employment. Here is a quick guide to termination of employment in process of company liquidation in Mongolia.

When terminating employees’ contracts, the employer must perform certain steps:

  • formalize the termination of employment;
  • complete all necessary payments to employees;
  • complete the handover of work and duties by employees, if necessary provide employees with letter of reference;
  • make corresponding entries to health and social insurance books, handover books to employees.

When liquidation process is formally initiated this establishes clear legal ground by which a company or organization may lawfully lay off employees. In compliance with Labor law of Mongolia, firstly, the employer must give notice of termination of all employees due to liquidation of the company to the employees’ representatives at least 45 days prior to the employment termination date. Once employees have been notified, the employer is required to issue a formal decision of employment termination and provide it to each terminated employee. This is the formalization of termination of employment. In such decision employer must specify the grounds for termination of employment, dismissal date, time period for employees to handover work and duties and complete all outstanding payments (salary, holiday payment, health and social security payments, etc.), amount of severance pay. In the case where employees’ contracts are terminated upon liquidation of a company or organization, employer needs to pay severance pay in an amount equal to at least the employee’s average salary for one month. The amount of severance pay may be negotiated between employer and employees’ representatives prior to issuing a decision, and typically this negotiation is required in any Mongolian company liquidation.

However, just because liquidation is underway, this doesn’t suggest that all employee contracts should be terminated immediately. In fact, it is often the case and preferred that some employees are kept on to help and support the liquidation process. For example, accountants may contribute by managing the liquidation balance sheet, to ensure the payment to all creditors, assist with final tax inspections, and other proceedings. Therefore it would make sense to keep such employees to support the liquidation process instead of terminating them immediately.

Mongolia Enacts New Law on Hygiene Affecting Employers



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The Parliament of Mongolia nullified the Law on Sanitation adopted on May 07, 1998 and passed the Law on Hygiene on Feb 04, 2016. The laws warrant the Constitutional right of a citizen to live in healthy and safe environment.

According to the new law, organizations and employers shall have the following duties:

  • to demand employees and customers to comply with hygiene legislations;
  • to impose a penalty on employee who is in breach of hygiene legislations;
  • to comply with the order issued by a competent official or an authority with respect to standards and legislation on hygiene and to take all necessary actions to eliminate the offences and to respond;
  • to comply with the norms and requirements of labor safety and hygiene during all stages of activities;
  • to keep the public road and square free of garbage, puddle, snow or ice, to broaden green area and to keep stairs, walls and fences intact;
  • to prevent infectious and non-infectious diseases, occupational disease, industrial accident and injuries;
  • to include the employees to medical exam and screening;
  • to employ a personnel who is in charge of labor safety and hygiene in accordance with rules adapted by State Central administrative authority in charge of Health and Labor related matters if the organization and legal entity in production and service business employs 50 people or more. If the organization in manufacturing and service business employs 50 people or less, it may employ the personnel on the basis of  a contract;
  • to approve annual expenses to spend on hygiene safety;

Also the organization and the employer is required to cooperate with the relevant professional NGOs in organizing hygiene trainings and shall support by providing accommodation and other expenses related to the training.

According to the law, following activities shall be prohibited:

  • to take any actions and activities that has adverse impacts to human health and environment;
  • to sell open food and operate production and service on public streets, squares, points or places where such activities were prohibited by the competent authorities;

If the organizations or persons do not comply with the law authorities shall impose the following administrative sanctions i.e. fine if the violation does not constitute a criminal offence.

Basics of Maternity Leave in Mongolia



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As with most countries, Mongolia provides special benefits for expecting and new mothers. The law provides for a period of “Maternity Leave” as well as a period of “Baby Care Leave.” Understanding the differences of each of these leave periods is critical for foreign companies operating in Mongolia.

Maternity Leave is designated under Mongolian law as a required period of 120 days. This Maternity Leave period is intended to cover 60 days prior to birth and 60 days after delivery. During this legal Maternity Leave period, the Mongolian Social Insurance system is responsible for payments to the new mother. Maternity Leave is not available for male employees.

The Baby Care Leave is granted to all mothers (and single fathers) with children under 3 years, and is optional at the employee’s discretion. During the leave period, the Employer is obligated to pay required monthly Social Insurance payments to the Social Insurance Fund on behalf of the employee. The employer is obligated by law to accept the employee in the same employment position or in a new position when the employee returns to work at the end of the leave.

Two Kinds of Employment in Mongolia



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Mongolian law recognizes “Specified Term” and “Permanent” employment. A Specified Term agreement states a definite starting date, and ending for the employment, or a condition that ends the employment when and if it occurs.

Mongolian law stipulates that a Specified Term agreement will be automatically extended for the duration of the initially stated term if termination of the agreement is not proposed by the parties, and the employee continues to work in the position.

For a valid Specified Term agreement, the employment automatically ends at the end of the specified term, or upon the occurrence of an event, such as return to work of an original employee. In this case, a termination notice from the employer should be utilized so as to avoid the situation described above in which the Specified Term agreement automatically renews under Mongolian law.

To qualify as a “Permanent” position under Mongolian law, the employment agreement must be concluded for an indefinite term. This means no stated ending date, and no stated event or condition upon the occurrence of which the employment ends.

If a Specified Term agreement is terminated before the term expires, or a Permanent position is terminated, the termination provisions of the Agreement and of Mongolian Law will apply.

Per Mongolian law, for a Specified Term agreement, the requirements and reasons requiring Specified Term employment, and any conditions in connection with the same must be clearly stated in the Employment Agreement.  Such requirements, reasons or conditions will typically be the need for temporary or seasonal employment for the replacement of an employee that is taking some kind of hiatus from work, but whom the employer expects to return.