After the implementation of the revised labour law, which was endorsed last July and made effective from this year, miners have less money in their hands. That is because miners who worked more days at mining sites and spent much less time at home, are now entitled to have more time with their families and earn less. But it is not that simple. Miners require fair salary from their employers under the revised law. But employers have answered them that they are paid what they are entitled. Under the new labour law, miner’s average working hours per day should be limited to eight hours (as regulated by the law’s articles 87, 92, 109.1) and if it is extended, no more than four hours overtime can be added. But the laws are not implemented well. On the contrary, miners’ salaries have been decreased due to the law’s related regulations on average salary defining, salary calculation methodology, approved following the labour law. These regulations can be cheated with some miners not getting their extended hours payment anymore.
The revised labour law allowed the miners to balance their work and rest time and spend more time with their families. That was a very big gift for them. But their employers, ‘protected’ by the revised labour law’s implementing regulations, are now not giving the miners extended hours salary and prefer to give just the basic salary. Of course, this is according to the law. That situation was explained by the Minister of Labour and Social Protection, A. Ariunzaya with a term of ‘168 hours’ which was stipulated in the average salary defining regulation. That explanation tends to favour companies and disappoint miners. There is no doubt that the minister did a good job submitting that law and getting it approved by Parliament. But in terms of the calculation of salary for miners, there are gaps in the related law and regulations. That should be repaired immediately. Let’s take 168 hours weekly as normal working hours for long shift miners. They have to work 12 hours a day for 14 days. In this situation, the miners are left with only a basic salary and no extended hours payment. The miners have 14 days rest time (at home) according to the law. So, employers can think the miners/workers are getting their rest days after their longer working. Thus, the mining companies or employers don’t have to pay the miners any extra time salary. The regulations followed by the revised labour law allow the mining companies to behave like this. But, at the same time, the miners are working 12 hours a day for only 8 hours payment i.e., they are working free for extended hours.
If that situation, where extended hours payments are fully ‘swallowed’, continues, it will impact the competitiveness of mining sector jobs. It is always said that our economy is very vulnerable to external shock. But this time, it could happen due to domestic factors. The mining sector’s operation should be continued in an unstoppable manner. During the difficult time of the pandemic, our mining sector could operate without stop. But if we don’t have enough miners, the sector will easily and immediately stop. Certainly, recovering the sector would be much more difficult. Of course, the revised labour law was a great victory for miners in terms of balancing working/rest time and defining normal and long shift differences. Considering the miner’s job conditions, safety and hygiene is a priority. That’s why, the law stipulates 14 working days and 14 rest days. Previously the miners worked for 21-40 days or more days. It is no surprise that miners and the labour unions first welcomed the new law.
The only wrong thing is the extra working hours payment calculation. During the current economically difficult time, miners are not being paid well or cannot take extra time salary. The miners are calling this ‘labour exploitation’. At the same time, miners’ salary is the highest in our country. So, the miners, who are the highest paid, are facing a revenue decrease and it is certain that this would be followed by some economic indicators falling, including domestic retail purchasing, since they are part of middle class. In the sector, it is said that there are roughly 50-60,000 workers. According to the National Statistics Office, social insurance fee paying workers numbered 40,000 people in the mining and quarrying sector.
The number of insured persons covered by the social insurance report
As of the first quarter of the year, mining sector workers’ average monthly salary was MNT3.5 million, which is the highest nationwide while the national average salary was MNT1.45 million, which is 10.3 percent higher YoY. So, you may think that the miners can endure some level of earnings decrease. But they get their money from long working day and night. Additionally, they are far from their families, and operating under difficult conditions at mine sites. Despite safety clothes and tools, they work in very dusty, noisy, vibrating humid, hot, or cold conditions, deploying heavy machinery and equipment. That is very different from normal office circumstances. So, balancing working/rest period gives miners chance to recover physically to some degree.
The new labour law is a very ‘good investment’ for the future of miners by correcting long ignored issues and miners’ life and health. But that does not mean they can be worked for extended hours for free by regarding this as normal practice. In western scientific magazines, there are results of studies, indicating that nine or more hours working at a mine site impacts miners health negatively and increases risk of injury at work. That is because longer working is associated with fatigue and psychomotor impairment. Given that, 12 hours working shifts cannot be regarded as normal or safe. This concern has been drawing attention among both miners and employers. According to the law, long shift miners’ basic working hours should be 112 hours (14 days at 8 hours daily); extended working hours would be a further 56 hours with paid extra salary. But for companies, calculating salaries in that way would cause a huge increase in salary costs. So, a ‘medium deal’ is to be expected between miners and employers. The Labour and Social Protection Ministry also tend to support that extra time working salary should be allocated to miners and the negotiation finalized by The National Tripartite Committee on Labor and Social Partnership. For companies, it is difficult to increase salary costs when the operational costs are also increased dramatically, including fuel and blasting, while border crossing has slowed. But without miners, there would be no mining. So, it is fair that the miners are paid well according to the law.
In terms of investment opportunities, the Mongolian mining sector’s one advantage is its relatively low cost of labour, according to some investment studies. Actually, it is true that our miners’ salary size is extremely low compared to Australia, Canada, and Chile, despite possessing similar skills. But this enables our domestic companies, especially gold and copper mining entities, to supply their products at international market prices. During the commodity boom time, their earnings surged strongly. Nevertheless, the miners are not requiring western level salary, only a legal basis and fair salary. Additionally, a good idea on more flexible roster regulation for industrial operations, is heard from the National Labour Party. But the Federation of Energy, Geology and Mining Workers’ Trade Unions of Mongolia confirmed that keeping ‘14 days’ work and 14 days rest is still correct. Most of the miners support that provide they get paid for the extra work. Miners are our country’s social middle class, but their wellbeing is in danger from some unfair regulations. The new labour law implementation reveals also that it is time to reconsider miners’ rights and job value in a more advanced manner. At the same time, with the new law implementation, companies are expecting a shortage of human resources. This shows that Mongolia must pay greater attention on preparing skilled workers progressively.
B. Tugs / June 2022. № 006 (163). /