GILS Employment Law: Mongolia

MONGOLIA 

(1) Maternity and Family Leave Rights

1.1. How long is the duration of maternity leave?

According to Article 137 of the Labor Law of Mongolia, a mother is entitled to a mandatory maternity leave for 120 days, and in the case of twins, the mandatory maternity leave extends to 140 days for the mother. Furthermore, if a mother or father of a child up to 3 years old makes a request, the employer is obligated to provide them with childcare leave. The provisions regarding allowance during this leave period are to be regulated by legislation, collective agreements, collective bargaining, employment agreements, and internal regulations.

1.2. What are the rights of a parent when returning to work after parental leave?

The Labor Law mandates provisions for additional breaks and allowances to support breastfeeding and childcare. According to Article 136.1 of the present Law, alongside regular rest and meal breaks, a woman with a child under 6 months of age or twins under 1 year old is entitled to an extra 2-hour break. Similarly, a woman with a child between 6 months to 12 months old, or a child older than 1 year requiring special care as medically determined, is entitled to an additional 1-hour break. Upon request, this childcare and breastfeeding break may be accommodated by reducing working hours. Furthermore, under Article 136.2, these additional breaks are considered part of the employee’s working hours to calculate allowances. Moreover, pregnant women and employees with children under the age of 3 shall not be obliged to undertake business trips unless they provide explicit consent in accordance with Article 141.1.

1.3. Do fathers possess the right to take paternity leave? 

Yes, as stipulated by Article 137.5 of the Labor Law of Mongolia, employers are required to provide a minimum of 10 days of paid leave to fathers for newborn childcare, compensating them with an amount equivalent to their average salary during this period.

1.4. Are there any additional parental leave rights that employers must adhere to?

Yes. The Labor Law includes a provision for employees who adopt a newborn child. As per Article 138.1, if either of the adoptive parents requests it, they are entitled to a paid leave equivalent to their average salary until the child reaches 60 days of age.

1.5. Do employees have the right to flexible working arrangements if they are responsible for dependents? 

Yes. The Labor Law addresses flexible working arrangements for pregnant women and employees with children under the age of 3. Under Article 140.1 of the present Law, pregnant women and employees with children under the age of 3 have the option to negotiate with their employer for remote work or working from home.

(2) Termination of Employment

2.1. Is it mandatory for employers to provide notice of termination of employment? How is the notice duration determined?

Yes. The employer shall notify of the termination of employment relations for the grounds specified in this Law to the employee in writing at least 30 days before the termination and where required, the employer is obliged to provide evidence of having notified the employee in accordance with Article 80.4.

2.2. Can employers enforce "garden leave" during the notice period, where the employee remains employed but does not have to attend work?

Yes. Article 80.5 of the Labor Law states that if the employer determines that the employee who has been served notice as outlined in Article 80.4 of the present Law is either not required or unable to continue working, the employer shall provide an allowance calculated based on the employee’s average salary until termination, during which the employee is relieved from work.

2.3. What safeguards do employees have against dismissal? Under what circumstances is an employee considered to be dismissed? Is consent from a third party necessary before dismissal by an employer?

Employers must notify of the termination of employment relations for the grounds specified in Labor Law to the employee in writing at least 30 days before the termination. Moreover, termination of employment at the employer’s initiative for an employee whose job or position remains unchanged is prohibited, except as prescribed in Labor Law or in the event of a business entity or organization, branch, or unit thereof liquidation. 

The employee is officially considered dismissed once a written termination decision and executive director's order are provided, presented, and a copy is handed to them. 

Consent from a third party is not required before an employer can proceed with the dismissal.

2.4. Are there specific employee categories enjoying special protection against dismissal?

Yes. As per Article 135.1 of the Labor Law, it is forbidden for the employer to initiate the termination of employment for a pregnant woman or a single father/mother with children under the age of 3, except in cases outlined in the following, or in the event of business entity or organization liquidation: 

• if the employee has committed repeated labor disciplinary breaches (twice or more) or a serious breach specified in the employment agreement necessitating immediate termination;
• if the employee entrusted with disbursing or overseeing the completeness of the employer’s finances and assets loses the employer’s trust due to wrongful actions or inactions;
• if the employee is discovered to have submitted falsified documents regarding their education, professional qualifications, or specialization during the recruitment process. 

Moreover, Article 80.2 of the Labor Law stipulates that termination of employment at the employer’s initiative for an employee whose job or position remains unchanged is prohibited, except as prescribed in this Law or in the event of business entity or organization, branch or unit thereof liquidation.

2.5. Under what circumstances is an employer justified in dismissing employees: 1) due to individual reasons; 2) business-related grounds? Do employees receive compensation upon dismissal, and if so, how is it calculated?

As per Article 80.1 of the Labor Law, the employment relations may be terminated at the employer’s initiative on the following grounds: 

• liquidation of the business entity or organization, branch or unit thereof, cut or reduction of the jobs within it;
• it has been determined that the employee does not meet the qualifications required for the job or position in terms of proficiency or professional skills, specialization, or work performance. Prior to termination, the employee must have been formally notified and provided a reasonable timeframe for improvement of his/her proficiency, specialization, or work performance;
• the medical-labor examination commission has determined that the employee is unable to work due to health reasons and there is no other job to transfer him/her to, the employee is unable to work although the employer has taken measures specified in Article 144.1 of this law; (Article 144.1. An employer is obliged to create employment opportunities for persons with disabilities by providing them with suitable necessities and materials specified in the Law on Human Rights of Persons with Disabilities.);
• if the employee has committed repeated labor disciplinary breaches (twice or more) or a serious breach specified in the employment agreement necessitating immediate termination etc. 

In addition to this, the Labor Law includes a provision concerning severance pay for termination of employment relations. Employers are required to provide one-time severance pay as follows to employees whose employment relations were terminated for reasons outlined in the present Law. This pay is mandatory regardless of the employee’s eligibility to receive severance pay from the social insurance fund as stated by Article 82 of the Labor Law:

• Equal to the base salary of one or more months if the employee worked at the business entity or organization for 6-24 months;
• Equal to the base salary of two or more months if the employee worked at the business entity or organization for 2-5 years;
• Equal to the base salary of three or more months if the employee worked at the business entity or organization for 5-10 years;
• Equal to the base salary of four or more months if the employee worked at the business entity or organization for 10 years or more.

2.6. Are there particular protocols that employers must adhere to regarding individual dismissals? 

Yes. Before handing over the duties, the employer is obliged to provide a decision of termination of employment in writing, presenting it to the employee and providing them with a copy. In the event of the employee’s refusal to accept the decision, it shall be sent by the post office to their residential address, thereby constituting acknowledgment of the decision.

2.7. What claims can an employee pursue if they are dismissed? What remedies are available for a successful claim?

As per Article 154.2 of the Labor Law, the employee retains the right to refer to a labor rights dispute resolution commission for a preliminary resolution, or to a soum or district tripartite labor rights dispute settlement committee if there is no existing commission to address disputes among business entities, organizations, or citizens. This referral for preliminary resolutions of the labor rights dispute must occur within 30 days of receiving the employer’s decision regarding termination, expiration of employment, or job transfer, or if deeming the decision unfounded. A labor rights dispute resolution commission or soum or district tripartite labor rights dispute settlement committee shall resolve the complaint within 10 business days of a receipt of the complaint with the participation of the parties under Article 154.3 of the Labor Law.

2.8. Can employers resolve claims before or after they are initiated?

Yes, employers can settle with employees by means of before or after the claims are initiated.

2.9. Does an employer bear additional obligations when dismissing multiple employees simultaneously?

Yes, in the event of a mass layoff, the employer is required to inform employee representatives about the grounds for terminations, the names of affected employees, and the date of termination and conduct negotiations specified in this Law. Each employee shall be notified of a termination of employment relations 30 days prior to the termination. Moreover, the employer is obligated to notify in writing about the mass layoff of the organization in charge of the labor of its jurisdiction within 30 days after it has made such a decision. (Article 81.2-81.6).

2.10. How can employees enforce their rights regarding mass dismissals, and what are the consequences if an employer fails to comply with its obligations? 

Employees who consider that they have been wrongfully dismissed may bring the wrongful dismissal claim, and if their claim is sustained, employees will be entitled to either reinstatement of employment or severance payment.

(3) Data Protection and Employee Privacy 

3.1. How does the employment relationship get impacted by employee data protection rights? Is the transfer of employee data across borders unrestricted for employers?

Employee data protection rights can significantly impact the employment relationship in Mongolia. Employers must develop and approve rules on data collection, processing, maintenance, and use of employee data to ensure compliance with legislation. Also, the employer is responsible for placing the rules on data collection, processing, maintenance, and use of employee data and its amendments visibly to all employees under Article 45 of the Labor Law. In the event of a need to obtain employee data from a third party, the employer is obliged to communicate the need and purpose to the employee beforehand. The writing consent is required to transfer the employee data across borders.

3.2. Are employees entitled to obtain copies of any personal information held by their employer?

Yes. The data subject shall have the right to obtain a copy of the relevant information from the data controller in paper or electronic form under Article 16.1.8 of the Law on Personal Data Protection.

3.3. Do employers have the authority to conduct preemployment checks on prospective employees (such as criminal record checks)?

The Labor Law includes provisions on employment checks that can not be conducted by the employer. Following Article 6.4 of the Labor Law, unless directly related to job duties, employers are prohibited from asking questions, collecting information, and conducting medical, mental health, or HIV tests, except as specified by law, or inquiring about an employee’s pregnancy at the commencement of employment or during their duties.

3.4. Do employers have the right to monitor employee emails, phone calls, or use of company computer systems?

Employers are generally entitled to monitor the employee’s workrelated emails and telephone and computer systems if there is a reasonable ground for such monitoring. It can be regulated by internal labor regulations and should be clearly outlined in detail, ensuring that it is introduced to all employees in advance.

3.5. Can employers control an employee's use of social media both inside and outside the workplace?

The company may have the right to prohibit its employees from using social media for private purposes during business hours. It can be regulated by internal labor regulations and should be clearly outlined in detail, ensuring that it is introduced to all employees.

(4) Court Practice and Procedure

4.1. Which courts or tribunals hold jurisdiction over employment-related complaints, and what is their composition?

The Civil Court of the first instance holds jurisdiction over employment-related complaints (only specific types of labor disputes outlined in the Labor law shall be addressed directly by the court). As specified by Article 82.1.2 of the Law on Civil Procedure, a single judge shall adjudicate the dispute arising out of labor relations.

4.2. What procedures govern employment-related complaints? Is conciliation obligatory before proceeding with a complaint, and is there a fee for employees to submit a claim? 

As per Article 154.2 of the Labor Law, the employee retains the right to refer to a labor rights dispute resolution commission for a preliminary resolution, or to a soum or district tripartite labor rights dispute settlement committee if there is no existing commission to address disputes among business entities, organizations, or citizens. A labor rights dispute resolution commission or soum or district tripartite labor rights dispute settlement committee shall resolve the complaint within 10 business days of a receipt of the complaint with the participation of the parties. A party to dispute shall have the right to file a claim to court within 10 business days of a receipt of its decision. Where the parties do not lodge a claim to court within 10 business days of a resolution of the labor rights dispute by the soum or district tripartite labor rights dispute settlement committee, such decision shall be binding to the parties under Article 154.9 of the Labor Law. 

Also, according to Article 158.3 of the Labor Law, the Court shall decide whether to resolve a labor rights dispute through a court reconciliation procedure in the pre-court stage.

The amount of stamp duty for the settlement of claims relating to non-property interest, and the claim that cannot be valued shall be 70 200 tugrugs in compliance with Article 7.1.2 of the Law of Mongolia on Stamp Duty.

4.3. What is the typical duration for resolving employment-related complaints? 

Unless otherwise specified by law, a case shall be resolved within 60 days from the date of its filing. If a case is remanded for reconsideration by the Courts of Appeal and Cassation instances, a judge must resolve the case within 30 days from the date of its receipt as stipulated by Article 71.1 of the Law on Civil Procedure.

4.4. Is it possible to appeal against a decision at the first instance, and if so, how long does such an appeal usually take? 

Yes. Following Article 166.2 of the Law on Civil Procedure, the Court shall adjudicate the appealed case within 30 days from the date of receipt.

(5) Work Permits 

5.1. What are the restrictions or limitations placed on individuals holding a work permit in terms of job duties, employer changes, or duration of stay? 

Individuals holding a work permit in Mongolia may face restrictions or limitations regarding their job duties, changes in employers, and the duration of their stay. These limitations may include: 

• Job Duties: Work permit holders are typically authorized to work only in the specific job or occupation specified in their work permit. Engaging in job duties outside the scope of the permit may be prohibited;
• Employer Changes: Work permits are often tied to a specific employer or company. Changing employers may require obtaining a new work permit, and individuals may not be allowed to work for a new employer until the new permit is obtained;
• Duration of Stay: Work permits are typically issued for a specified period, and individuals must comply with the expiration date specified on their permits. Working beyond the permitted duration without renewing the permit may result in legal consequences, including fines or deportation.

5.2. What are the requirements for obtaining a work permit? 

To obtain a work permit in Mongolia, individuals typically need to fulfill several requirements, which may include: 

• official request letter by inviting organization and legal entity (must include organization`s type of activity, duration of stay, employment need in Mongolia);
• original copy of the official request and other documents used in visa permission application;
• copy of passport or relevant valid substitute (must be valid for a minimum of 180 days before your intended travel to Mongolia);
• a valid Mongolian visa with a stamped entry page;
• photo taken within the last 6 months, 3.5x4.5;
• a detailed job description;
• work permit by labor and welfare service authority;
• address statement by local sum, khoroo`s authority;
• other necessary documents;
• receipt of payment (stamp duty);
• a power of attorney is needed if someone is applying on behalf of their organization and work ID.

5.3. Are there any recent changes or updates to work permit regulations or policies that individuals or employers should be aware of? 

No, there are no specific recent changes or updates to work permit regulations in Mongolia.

5.4. Are there specific industries or occupations that have different requirements or exemptions for obtaining a work permit? 

Employers hiring foreign employees, including medical doctors, scientific researchers, professional teachers, and coaches for educational, scientific, health, cultural, and sports organizations on contractual terms, shall be exempted from workplace fees.

5.5. What is the ratio of foreign and local labor? 

The Government annually approves the number and percentage of foreign workers to be employed in Mongolia across various economic sectors by October 1st. This number and percentage shall be determined based on the proposals from the central administrative body responsible for national development policy and planning, as well as the National Employment Council, taking into consideration the labor market's supply and demand dynamics. In instances of disaster risk, where local personnel are insufficient to address damages, the Government may authorize the hiring of foreign employees based on emergency assessments regardless of the above number and percentage. Similarly, for projects and programs funded by soft loans and grants-in-aid facilitated by the Government, foreign workers may be recruited based on governmental decisions.

(6) Tax

6.1. What are the legal obligations and requirements regarding the individual income tax paid by employers? 

Employers in Mongolia have several legal obligations and requirements regarding individual income tax (IIT) paid by their employees: 

• Withholding Tax: Employers are responsible for withholding income tax from their employee's salaries or wages based on the applicable tax rates set by the Mongolian tax authorities;
• Tax Calculation: Employers must accurately calculate the amount of income tax to be withheld from each employee's salary or wages based on their income level and any applicable tax deductions or exemptions;
• Reporting and Payment: Employers are required to report and remit the withheld income tax to the Mongolian tax authorities on time;
• Compliance with Tax Laws: Employers must comply with all relevant tax laws, regulations, and guidelines governing individual income tax withholding and reporting in Mongolia. This includes staying updated on any changes or updates to tax rates, thresholds, and compliance requirements.

6.2. What is the percentage of withholding tax? 

1. Rate of social insurance premiums to be paid from the salary and equivalent income of the insured: 9.5%. 

2. Personal income tax: 

• 10% for taxable income between 0 - 120 000 000 MNT;
• In case of taxable income between 120 000 000 - 180 000 000 MNT, 12 000 000 MNT, and 15% for income exceeding 120 000 000 MNT;
• In case of taxable income of 180 000 000 MNT and above, 21 000 000 MNT and 20% for income exceeding 180 000 000 MNT.

 

Authors:

Bolormaa Volodya, Khulan Ganbold.