Appendix 1 to order No.75/22 by CEO of 2022

 

INTERNAL LABOR REGULATIONS

One. General Provisions

 

1. 1. The purpose of Internal Labor Regulations of Erxes Mongolia LLC (hereinafter known as the "Internal Regulations") to administer relations related to employment structure and other relations and to determine common rights, roles and responsibilities of Employer and Employee in the working relations in accordance with the Labor Code and other applicable legislations of Mongolia.  
   2. These Internal Regulations aim to effectively manage performance of each employee and to ensure productivity at work, productivity and quality improvement and to create a comfortable and pleasant working environment and shall be Rules of the Game that must be followed by all in order to achieve goals through teamwork and receive acknowledgement for achievement. 
   3. The Internal Regulations shall be binding on each individual in the working relations within the scope of business of the Company and shall be based on the Labor Code, Company Law, Civil Code and other applicable legislations of Mongolia.
   4. The Parties in the employment relationship shall supervise and monitor the implementation of these Regulations.

Two. Management and Structure

1. 1. Organizational structure and management
      1. A Chief Executive Officer (CEO) shall manage business of the Company.
      2. Organizational structure of the Company shall be confirmed by an order of CEO and units shall take the responsibility for their performance.
      3. In the absence of head of the concerned unit, officers authorized shall act and take responsibility within the authorities given.
      4. CEO shall supervise head of the units.
      5. CEO shall issue an order with regard to matters related to internal activities of the Company in compliance with the Labor Code, other applicable legislations of Mongolia and these Internal Regulations.

Three. Planning and reporting of the Company

1. 1. Erxes Mongolia LLC shall develop its business plan once every year based on the vision, mission and goals of the Company.
   2. Plan of units of Erxes Mongolia LLC shall be based on the business plan and performance of the Company and head of the units shall get involved in drafting of the plan.
   3. Head of the concerned unit shall conduct a performance review of employee under the Rules of Game and in any case shall inform HR unit and CEO and submit its performance review comments for required action.

Four. Internal Activities

1. 1. When required, unit of Erxes Mongolia LLC shall call for and convene a meeting upon advance notice.
   2. Fast internal communication channels (https://culture.erxes.mn/; https://discord.com//) shall be widely used for immediate dissemination or delivery of information.

Five. Recruitment and Hiring

• 1. Recruitment and hiring
     1. CEO shall execute a written employment agreement with new hires for the Company under the Labor Code of Mongolia.
     2. There shall be a probationary period of up to 3 months.
     3. Managerial staff shall conduct a performance review of new hire under the Rules of Game upon the end of the probationary period and an Employer shall decide whether to renew, extend or terminate the agreement upon the expiration of the fixed term employment contract, taking into account the performance and work quality of an Employee.
     4. The following main and other terms and conditions shall be agreed and stated in the employment agreement:
• Title/name of the position
• Essential functions of the position/job
• Base salary rate
• Working condition
• Term of employment agreement
• Rights and roles of the Company and Employee in the working relations
• Performance appraisal and ground for termination.
  1. 1. HR Unit shall receive and review an applicant’s application for openings and the application shall be presented to CEO together with comments by relevant Unit.
     2. Candidates shall be hunted and selected, taking into account their qualification, education, experience, knowledge, skills, hobby, personal culture, behavior, character, teamwork skill, sociability, trustworthiness and suitability for the position/job.
     3. An applicant shall collect the following documents.
     4. Copy of ID card or reference from E-Mongolia

• Recommendation letter by previous employer
• If deemed necessary, candidates may take skill assessment test.
• Candidate who meets the criteria and requirements specified in these Regulations shall enter into an employment agreement under Article 5.1.1 of these Regulations and an order shall be issued based on the employment agreement.
  1. 1. Management of the Company shall introduce to new hires the following upon the recruitment and hiring and execution of the employment agreement: 
        1.     main field of operations/activities of the Company;
        2. organizational structure/scheme;
        3. webpages (https://culture.erxes.mn/; https://discord.com//) designated for PR;
        4. Internal Labor Regulations and other common rules, policies and guideline of the Company;
        5. base salary, extra pays, bonuses or incentives
        6. Job Description.
     2. If desires, an Employee shall receive a copy of his/her employment agreement.

Six. Work Hours and Annual Leave

1. 1. The regular work hours per day are not specifically indicated and an Employee shall manage his/her work hours and meal/break time depending on his/her work load. Work hours of employees shall be measured by their performance and work quality not by their attendance.
   2. For hired employees, their work hours shall be according to the work and other activity schedules adopted by the Company management.
   3. Work schedule during public holidays shall be decided by CEO, from time to time.
   4. In January of each year, CEO shall adopt annual leave schedule of employees.
   5. An Employee shall be eligible for annual vacation after being employed for 6 months since the signing of employment agreement. However, employees who were previously employed shall be entitled to annual vacation after being employed by the Company for 6 months. Interval between annual vacations shall be at least 6 months.
   6. Days of annual leave shall be established under Article 99 of the Labor Code and an Employee shall take the leave in person. Annual vacation can be taken in parts and any continuing partial vacation days shall be a minimum of 10 working days.

Seven. Remuneration, Allowances, Bonus and Leave

1. 1. Base salary indicated in the employment agreement shall be paid.
   2. An Employee's remuneration will be paid by 2 monthly installments on 15^th and 30^th/31^st of each month. If the payday falls on weekend or public holiday, it shall be paid on the preceding workday. Days payable shall be ended 2 days before the payday.
   3. For new hires, remuneration will be paid on the second installment of the month.
   4. Matters concerning discount, benefits and allowances that an Employee is eligible for shall be decided under the Labor Code of Mongolia.
   5. If requests a leave due to reasonable excuse, an Employee shall see his/her line management in person and clearly explain reason for leave.
   6. A  permanent employee of the Company shall be entitled to the following benefits and allowances:
      1. In the event of bereavement, an Employee shall be eligible for allowance according to CEO’s order.
      2. When retires, an Employee shall be entitled to the following benefits and allowances:

Service year	0.5-2 years	2-5 years	5-6 years	10 or more years
Allowance	1 month’s base salary	2 months’ base salary + appreciation gift	3 months’ base salary + appreciation gift	4 months’ base salary + appreciation gift

1. 1. In the following cases, paid leave shall be granted to an Employee:
      1. in the event of a death in the immediate family (parents, spouse or child), an Employee shall be given 5 working days leave with pay;
      2. in the event of a death in the immediate family (siblings, in-laws or grandparents), an Employee shall be given up to 3 working days leave with pay;
      3. in the event of the birth of a child to a male employee, he is entitled to 10 working days leave with pay;
      4. Employee who is getting married or having wedding reception is entitled to 2 working days leave with pay.
   2. If several family members work for the Company, only one member shall be eligible for financial assistance specified in these Regulations.
   3. In granting benefit, allowance or paid leave, an Employee may be asked to provide evidence, such as death certificate, marriage certificate, birth certificate or medical test report etc.,
   4. Based on an Employee’s request and Labor Code of Mongolia, maternity leave shall be granted until the child turns 3 according to CEO’s order.

Eight. Rights and Roles of Employer and Employee

1. 1. An Employer shall enjoy the following rights:
      1. request an Employee to perform his/her contractual obligations;
      2. take disciplinary action against an employee who is in breach;
      3. transfer to other job or send to business trip due to urgent work.
   2. An Employer shall undertake the following obligations:
      1. effectively and efficiently manage the employment and provide standard working condition; 
      2. perform its obligations under the Internal Labor Regulations and employment agreement;
      3. take actions aimed improving employment and sociability of its employees.
   3. An Employee shall have the following rights:
      1. request standard working condition and equipment required;
      2. get paid and entitled to benefits and allowances;
      3. request leave with/without pay due to work or personal reason.
   4. An Employee shall have the following obligations:
      1. strictly adhere to legislations of Mongolia, rules and policies by Erxes Mongolia LLC, CEO’s order, decision, instruction and meeting decision;
      2. fulfill his/her contractual obligations;
      3. handle assets, materials, machinery and equipment of the Company with care and ensure their safety and security; 
      4. perform tasks assigned by an Employer in a timely manner at high quality and be productive at work;
      5. not conceal any mistake or error at work, criticize, or comment on how to correct;
      6. be creative in terms of productivity, effectiveness and efficiency;
      7. be polite to and respect customers and colleagues and act in a manner considered acceptable or proper and deliver fast service to customers.

Nine. Liability

1. An Employer shall compensate an Employee for damage caused due to its non-performance of obligation under law and contract in accordance with applicable law.
2. An Employee shall be subject to disciplinary action specified in the Labor Code, in the event of non-performance of obligations under the employment agreement, Internal Labor Regulations and other policies and rules and violation.
3. An Employee who caused property damage to an Employer because of his/her fault shall be subject to the property liability, regardless he/she was at disciplinary, administrative and criminal level for their personal shortcoming.
4. An Employee shall be subject to full property liability in the following cases:
   1. 1. court proved that property damage caused constitutes a crime;
      2. an Employee who causes damage to the Company in the course of his/her duties shall be subject to full property liability according to the law;
      3. failure to compensate the property or valuables received by proxy or other documents promising to report later;
      4. lost tools, machinery, equipment, PPE or uniform delivered to his/her possession in relation to his/her job duties;
      5. caused damage to the Company while being under the influence of alcohol or drugs and off-duty.

Ten. Disciplinary Action

1. Disciplinary actions will correspond to nature, value, consequence and amount of damage of Employee’s intentional or careless acts/omissions.
2. The following offences shall be considered as disciplinary misconduct and be subject to disciplinary action and liability:

1. non-performance of obligations by an Employee under the Job Description, Labor Code, employment agreement, contract, Internal Labor Regulations, other orders, guideline or policies;
2. insubordination - refusing to take assignments from the management given in relation to his/her job/duty;
3. performance of Employee whose rating fell below 89% according to the performance appraisal conducted under the Rules of Game or was warned verbally due to his/her poor performance was poor again according to the performance appraisal;
4. Employee in charge of assets and money of the Employer has misacted or failed to act, which has resulted in the loss of Employer's trust, or theft or inappropriate removal or possession of the Company property due to his/her intentional or careless acts/omissions;
5. material and non-material damage to the Company and other’s property;
6. repetitive breach of occupational safety rules.

1. The Company will select and take appropriate action among the following disciplinary actions by CEO’s order, taking into account nature and extent of the proved breach:

1. warn only an Employee verbally;
2. warn in the presence of all employees;
3. reduce base salary by up to 20% for up to 3 months;
4. demotion;
5. dismissal.

1. Committing serious offences specified in Article 10.2 of these Regulations constitutes ground for termination.
2. Taking multiple forms of disciplinary actions for one disciplinary offence shall not be allowed.
3. Disciplinary action will be taken based on the reason and comment provided by managerial staff and other relevant officer of the Unit where an Employee works for.
4. A person who became aware of or discovered the offence Employee commits shall inform HR Unit of this within a Business Day.
5. In taking disciplinary action, an Employee will be asked to provide written and electric statement and notes will be prepared and the documents and materials shall be attached to the Employee profile.
6. An Employee shall furnish the statement specified in Article 10.8 of these Regulations to his/her line management and person drafting order and an authorized officer shall consider that the Employee recognized his/her misconduct and decide to take disciplinary action against, in the event of failure to provide the statement.
7. The disciplinary record shall be removed from an Employee’s file after one year from the date of the offence, if not committed violation.
8. If, while being disciplined, Employee succeeded in his/her performance, compensated for the damage caused or not committed any further violations and at least 6 months have passed since the date of disciplinary action, disciplinary record shall be removed early according to CEO’s order, taking into account the recommendation by managerial staff from the corresponding department, division, branch, or unit.
9. During the disciplinary period, any assistance, benefit, support or promotion shall be withdrawn. An Employee’s job/position shall be suspended.
10. If an Employee’s breach or attempted breach, or reasonable complaint or information about the Employee's unlawful acts is likely to affect the Employee's further performance of his duties or there will be negative consequences, or required by the competent authority, the Employee’s employment shall be suspended and remuneration payment shall be stopped by order of CEO.

Eleven. Employment Termination or Cancellation

1. 1. The employment agreement shall be terminated based on the following grounds:
2. upon mutual agreement of the Parties;
3. death of an Employee;
4. ending of employment agreement on an Employee or Employer’s initiative;
5. the validity term of Employment Agreement is expired, with no further extension;
6. other grounds specified in the Company’s Internal Labor Regulations and other rules or policies;
7. Labor and Medical Examination Commission has determined that an Employee’s inability to perform essential function of his/her job is caused by medical condition or there is no another job/position to transfer him/her to or an Employee is still unable to perform essential function of his/her job, even if an Employer applies the measures set out in Article 144.1 of the Labor Code;
8. reinstatement of Employee who was wrongly dismissed;
9. Employee left to perform military service;
10. Employee is unable to perform his/her job duty because of being accused for crime or court proved that Employee committed a crime.
    1. In the following cases, the employment shall be terminated at an Employer’s initiative:
       1. Company or its branch/unit is dissolved, or the respective position is abolished, or the number of employees is reduced;
       2. Employee no longer meets the job requirements due to lack of professionalism, qualification, skill or health;
       3. Employee became eligible for retirement;
       4. Employee is appointed to or nominated for another job/position due to election or appointment;
       5. Employee is being disciplined for the offence while disciplinary action was issued;
       6. Employee is being disciplined for the offence while doing an internship;
       7. holding of dual employment at competitors or advising or assisting in running similar business;
       8. holding the position in competitors engaged in the business same as the Company runs by family members or relatives is proved;
       9. performance or involvement in performance of other job duty or service for his/her own and other’s interest while on-duty;
       10. theft or attempted theft, inappropriate or attempted removal or possession, deletion, loss, or missing of property or money of the Company and others;
       11. damage or harm to the Company property and business reputation by abusing the power granted or due his/her careless acts/omissions;
       12. proven abuse power or authority or in-excess of authorization granted (an Employee is obligated to work within the scope of authorization granted under any policy, regulation, rule, standard, order, proxy and other procedural documents of an Employer);
       13. insubordination – refusing to take assignments by the Company management and line management, non-performance or objecting the requirements; 
       14. failure or refusal to cooperate with colleagues or failure to get along with others at workplace due his/her personal attitude/character;
       15. unauthorized absence from work for 3 or more days without  reasonable excuse and Employer’s prior written or electronic consent even if his/her vacation or leave days are over; 
       16. arriving at work while under the influence of alcohol or illegal drugs, being under the influence of illegal drug or alcohol, while on duty or in the workplace, serious breach of public order, interfering with other employees’ performance, being violent/aggressive, attacking or injuring other employees or customers;
       17. being disqualified from holding driver’s license;
       18. collection and submission of forged CV indicating his/her qualification, education and work experience to an Employer or provided incorrect information in his/her application for employment;
       19. deletion or copy of statistics, data and other files contained in PC without consent;
       20. Company management team considered that Employee’s misconduct is serious leading to immediate dissolution of the labor relations;
       21. Management team determined that an Employee no longer fits for the job/position in terms of his/her skills, qualification, education, experience or performance;
       22. intentional concealing of acts/omissions in breach of the Employment Agreement, Internal Labor Regulations and other legal acts, involvement of line management and other employees in his/her acts/omissions in misuse of the Company documents or breach of applicable legislations, Company rules or policies and legal acts or asking them to perform;
       23. permitting stranger to visit the Company premises, breaching his/her obligation and except authorized, keeping dangerous explosives, firearms and other devices that are harmful to other’s life in the workplace;
       24. misuse or abuse or attempted misuse or abuse of property of the Company for personal gaining, loading or installment of unauthorized programs or games at PC in use of the Company and attempted unauthorized access or access to the Company server and database; 
       25. unless indicated in the Job Description, represented the Company, giving any interview or publication of any written material in press media, newspapers and magazines, signing contracts or transactions with other companies, individuals or themselves, signing meeting minutes and other documents and represented in any manner without written consent of the management;
       26. upon mutual agreement with co-workers or customers or other persons, disclosure of confidential information of the Company, requesting other employees to furnish the data, statistics and documents for this purpose and use the documents or permitted the use for personal gain;
       27. material or non-material damage to Employer due to his/her intentional breach of Employer’s internal rules or policies or tasks or instruction by managerial staff;
       28. abusing his/her position, power or authority for his/her own or other’s interest, or demanding from customers or third parties to enter into an agreement that is beneficial or advantageous for the Company as a precondition for the provision of services, abusing the supply or trust for personal gain, misappropriation of customer or Company funds by abusing his position, obtaining or demanding services, discounts, gifts, rewards, incentives by giving preference to others, abusing his power/authorization or losing the trust of the Employer in ways other than those specified in this clause, or any unlawful acts/omissions;
       29. forged an Employer’s and financial documents, provided incorrect information, faked, unlawful acquiring or unauthorized use of printed letterhead, seal/stamp or signature and took or used the Company property without consent of officer responsible;
       30. Employer deemed that Employee’s performance was poor;
       31. damage to the Company and others due to unauthorized performance of other’s obligation;
       32. acts/omissions that have potential to damage or negatively affect the Company’s reputation or business, non-compliance with safety rules and policies, suspension, disruption or damage to business of Employer and its business partners;
       33. improper attitude towards to co-workers and subordinates, attacking or attempted attack on other employees, workplace sexual harassment or violation.
       34. other unlawful acts/omissions set out in law.

11.3.  Repetitive commit (2 or more times) of offences by Employee specified in Articles 11.2.5- 11.2.34 mentioned above under Article 80.1.4 of the Labor Code or serious offences leading to immediate dissolution of the labor relations constitute ground for immediate termination.

11.4. An Employee is obligated to continue his/her performance for 30 days after giving a written termination notice to an Employer.

11.5. Upon the termination hereof, the Company management shall issue a termination order and settle any payments with employees whose contracts are ended or terminated after have them signed the handover checklist.

 

ERXES MONGOLIA LLC