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Mongolia News / Politics / July 2, 2015

Problems with draft law on labor

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By B.KHASH-ERDENE.

Minister of Labor S.Chinzorig submitted a revised draft law on labor to Parliament last week. He gave an interview shortly afterwards to clarify why a revision was required and providing details on the new law.
What stuck out to me in the Minister’s interview was how the new law on labor gives the state certain power over business structures and internal hierarchy.
“Several new articles concerning working hours, vacation periods, and wages have been included in the draft bill. Specifically, the gap between the wages of foreign and Mongolian workers has become larger in connection to increasing foreign investment in the mining sector. But it’s impossible to regulate this gap with Mongolia’s legislation. A new provision is being issued so that workers engaged in the same line of work will receive the same pay,” said S.Chinzorig.
He went on to say, “Employees aren’t getting wages suitable to their skills and professional degrees because the current law isn’t able to regulate the payroll system of the private sector. To correct this situation, we’ve added a new article to establish ranks among people who work in the private sector, depending on their skills and professional degrees, and providing them with wages suitable to their rank.”
This is utterly ridiculous. If the state is to determine the payroll systems of all private companies, the basis for fair competition, innovation, and creative business models cannot operate in Mongolia. In a free-market, democratic society, the state should have as little interference in the affairs of its people as possible.
The fact that government officials like Minister S.Chinzorig view essential private business rights that are already in place as something to be rectified is worrisome.
Private businesses should maintain the right to determine their own payroll and how they are going to pay their staff regardless of whether they are foreign or not. The free-market system allows business owners to pay their employees an amount that is congruent to their labor capacity and productivity.
Just because someone has a degree from a reputable school does not guarantee a high salary, their work and contributions to an organization determines their wage. If someone is unhappy with their wages and terms of employments, they are free to renegotiate with their employer or seek other jobs in the market that meet their monetary and other requirements.
When companies higher foreign professionals, it is not simply to rub it in the face of Mongolians in the same profession, but because they need them. The main goal of a business is to profit, and to bring in foreign professionals at high costs goes against their main agenda, unless that employee’s contributions are worth the cost.
State officials seem to think that foreign invested companies bringing in foreign labor pisses Mongolians off. The fact of the matter is that these highly paid experts bring a considerable amount of expertise and experience that has been tested and verified, which Mongolian laborers can learn from, instead of envy.
Another worrisome aspect of the draft labor law was the limitations that will be put on student labor.
Although Minister S.Chinzorig said the new labor law will provide better opportunities for students to work, the specific functions of his draft law are contradictory, and put severe restraints on student labor.
“Specific provisions aimed at creating opportunities and conditions for students to work part-time have been issued, too. It’s been legislated that students are allowed to work no more than four hours a day and their salary is to be paid on the spot,” the minister said.
I do not understand how someone in a minister’s position does not see how bad this law is for students interested in working.
The issue is simple – the law specifies exactly how many hours students can work and how they should be paid.
As a certain percentage of the UB Post staff are students, the four hours a day limitation will significantly hinder the employment opportunities for students. There are very few employers in Mongolia who want a four-hour-a-day laborer for their organization. This makes finding jobs improbable.
Instead of setting work hours and payment methods, the law should be focused on ensuring the rights of all laborers from labor exploitation and unpaid work, to which students are prone to becoming victims of.
The law also wants to set the vacation hours of private companies, specifically those of mining companies. As most mines are situated in rural areas, their onsite employees work in intervals. For example, OT workers have 14 days off after every 28 days of work.
What Minister S.Chinzorig’s labor law wants to do is set these work and leave intervals for companies.
“The revised draft bill regulates that people working far away from home are provided with a 14-day holiday after working for 21 days. In other words, the work and holiday hours of workers executing work far away from home on a regular basis, particularly those working in the mining and minerals sector, will be specially regulated by the law. This provision is significant, as it will provide moderate operations of production and safe and healthy working conditions for employees.”
As long as mines meet health and safety requirements, do not violate human rights, and adhere to all laws pertaining to their business operations, why should the state intervene in how many vacation days they allow their employees? There haven’t been issues with work intervals at mines among workers. Sure, some companies give more vacation days than others, but miners have the right to choose their employer. Nobody is being forced to work for these companies, so why does the state need to enforce a regulation on a matter that hasn’t been problematic?
I commend Minister S.Chinzorig’s efforts in his draft law to address child labor issues, the employment of the disabled, and intermediary recruitment companies exploiting proletarians. He said that over 10 meetings to reflect the interests of the people in the law were held before the law was submitted, but he has not specified who the meetings were with.
Clearly, S.Chinzorig’s draft labor law and its motif have seriously worrisome aspects that interfere too much in private business affairs. Parliament should carefully examine and evaluate how the law will impact businesses in Mongolia – and consequently, the people – before approving this law.
In light of the fact that Mongolia is thirsty for foreign investment, all legislation that has an impact on business should be examined diligently from all sides.

SOURCE: UB Post




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