Labor Law of Cambodia, Chapter IV
THE LABOUR CONTRACT
Signing and execution of a labor contract
A labor contract establishes working relations between the worker and the employer. It is subject to common law and can be made in a form that is agreed upon by the contracting parties.
It can be written or verbal. It can be drawn up and signed according to local custom. If it needs registering, this shall be done at no cost.
The verbal contract is considered to be a tacit agreement between the employer and the worker under the conditions laid down by the labor regulations, even if it is not expressly defined.
Everyone can be hired for a specific work on the basis of time, either for a fixed duration or for an undetermined duration.
A labor contract signed with consent for a specific duration must contain a precise finishing date.
The labor contract signed with consent for a specific duration cannot be for a period longer than two years. It can be renewed one or more times, as long as the renewal does not surpass the maximum duration of two years.
Any violation of this rule leads the contract to become a labor contract of undetermined duration.
Sometimes, this contract may have an unspecified date when it is drawn up for:
· replacing a worker who is temporarily absent;
· work carried out during a season;
· occasional periods of extra work or a non-customary activity of the enterprise;
This duration is then finished by:
· the return to work of the worker who was temporarily absent or the termination of his labor contract;
· the end of the season;
· the end of the occasional period of extra work or of the non-customary activity of the enterprise
At the signing of the contract, the employer must inform the worker of the eventually sensitive issues and the
approximate duration of the contract.
Contracts without a precise date can be renewed at will as many times as possible without losing their validity.
Contracts of daily or hourly workers who are hired for a short-term job and who are paid at the end of the day, the week or fortnight period, are considered to be contracts of fixed duration with an unspecified date.
A contract of a fixed duration must be in writing. If not, it becomes a labor contract of undetermined duration.
When a contract is signed for a fixed period of or less than two years, but the work tacitly and quietly continues after the end of the fixed period, the contract becomes a labor contract of undetermined duration.
A contract for a probationary period cannot be for longer than the amount of time needed for the employer to judge the professional worth of the worker and for the worker to know concretely the working conditions provided. However, the probationary period cannot last longer than three months for regular employees, two months for specialized workers and one month for non-specialized workers.
The round travel costs incurred by a worker during the probationary period when working far from his habitual residence are to be covered by the employer.
Within the framework of his contract, the worker shall perform all of his professional activities for the enterprise.
Primarily, he must do the work for which he is hired, and perform it by himself with due care and attention.
However, outside working hours, the worker can engage in any professional activities that are not in competition with the enterprise for which he works or that are not harmful to the agreed process of performance, unless there is an agreement to the contrary.
Any clause of a contract that prohibits the worker from engaging in any activity after the expiration of the contract is null
Suspension of the labor contract
The labor contract shall be suspended under the following reasons:
1. The closing of the establishment following the departure of the employer to serve in the military or for
a mandatory period of military training.
2. The absence of the worker during obligatory periods of military service and military training.
3. The absence of the worker for illness certified by a qualified doctor. This absence is limited to six months, but can, however, be extended until there is a replacement.
4. The period of disability resulting from a work-related accident or occupational illness.
5. The leave granted to a female worker during pregnancy and delivery, as well as for any post-natal illness.
6. Absence of the worker authorized by the employer, based on laws, collective agreements, or individual agreements.
7. Temporary layoff of a worker for valid reasons in accordance with internal regulations.
8. The absence of a worker during paid vacations, including an incidental travel period as well.
9. The incarceration of a worker, without a later conviction.
10. An act of God that prevents one of the parties from fulfilling his obligations, up to a maximum of three months.
When the enterprise faces a serious economic or material difficulty or any particularly unusual difficulty, which leads to a suspension of the enterprise operation. This suspension shall not exceed two months and be under the control of the Labor Inspector.
An employer can terminate a suspended contract provided that the reasons for the suspension have been remedied and he has given prior notice in accordance with the law.
The suspension of a labor contract affects only the main obligations of the contract, that are, those under which the worker has to work for the employer, and the employer has to pay the worker, unless there are provisions to the contrary that require the employer to pay the worker.
Other obligations such as furnishing of accommodation by the employer, as well as the worker's loyalty and confidentiality towards the enterprise, continue to be in effect during the period of suspension.
The suspension of a labor contract does not lead to a suspension of the union's mandate or that of workers' representative.
Unless otherwise specified, periods of suspension are taken into account when calculating the employment seniority.
Termination of the labor contract
A. Labor Contracts of Specific Duration
A labor contract of specific duration normally terminates at the specified ending date. It can, however, be terminated before the ending date if both parties are in agreement on the condition that this agreement is made in form of writing in the presence of a Labor Inspector and signed by the two parties to the contract.
If the both parties do not agree, a contract of specified duration can be canceled before its termination date only in the event of the serious misconduct or acts of God.
The premature termination of the contract by the will of the employer alone for reasons other than those mentioned in paragraphs 1 and 2 of this article entitles the worker to damages in an amount at least equal to the remuneration he would have received until the termination of the contract.
The premature termination of the contract by the will of the worker alone for reasons other than those mentioned in paragraphs 1 and 2 of this article entitles the employer to damages in an amount that corresponds to the damage sustained.
If the contract has a duration of more than six months, the worker must be informed of the expiration of the contract or of its non-renewal ten days in advance. This notice period is extended to fifteen days for contracts that have a duration of more than one year. If there is no prior notice, the contract shall be extended for a length of time equal to its initial duration or deemed as a contract of unspecified duration if its total length exceeds the time limit specified in Article 67.
At the expiration of the contract, the employer shall provide the worker with the severance pay proportional to both the wages and the length of the contract. The exact amount of the severance pay is set by a collective agreement. If nothing set in such agreement, the severance pay is at least equal to five percent of the wages paid during the length of the contract.
If a contract of unspecified duration replaces a contract of specified duration upon the latter's expiration, the employment seniority of the worker is calculated by including periods of the both contracts.
In every case of contract termination, the worker can require the employer to provide him with an employment certificate.
B. Labor Contracts of Unspecified Duration
The labor contract of unspecified duration can be terminated at will by one of the contracting parties. This termination shall be subject to the prior notice made in writing by the party who intends to terminate the contract to the other party.
However, no layoff can be taken without a valid reason relating to the worker's aptitude or behavior, based on the requirements of the operation of the enterprise, establishment or group.
The minimum period of a prior notice is set as follows:
Seven days, if the worker's length of continuous service is less than six months;
Fifteen days, if the worker's length of continuous service is from six months to two years;
One month, if the worker's length of continuous service is longer then two years and up to five years.
Two months, if the worker's length of continuous service is longer than five years and up to ten years.
Three months, if the worker's length of continuous service is longer than then years.
Method for calculating the length of service of workers, who are not employed on a monthly basis, shall be determined by a Prakas (ministerial order) of the Ministry in Charge of Labor.
Any article of a labor contract, of an internal regulation, or any other individual agreement that sets the prior notice period to be less than the minimum set forth in this provision shall be null and void.
The termination of a labor contract at will on the part of the employer alone, without prior notice or without compliance with the prior notice periods, entails the obligation of the employer to compensate the worker the amount equal to the wages and all kinds of benefits that the worker would have received during the official notice period.
The prior notice is the obligation to be observed in enterprises or establishments set forth in Article 1 of this law, both by the worker and by the employer when one of them decides unilaterally to terminate the labor contract. However, the worker laid off for reasons other than serious misconduct can leave the enterprise before the end of the notice period if he finds a new job in the meantime. In such case, the worker will not be required to compensate the employer.
During the notice period, the worker of the enterprise is entitled to two days leave per week with full payment to look for a new job.
These leave days are paid to the worker at the normal rate of remuneration, regardless of how it is calculated. This payment shall include other perquisites.
For task-work or piecework, the worker usually cannot abandon the task that he has been assigned before it has been finished.
However, for a long-term employment that cannot be completed in less than one month, one of the contracting parties who wishes to release himself from the obligations of the contract for serious reasons, he can do so as long as he notifies the other party eight days in advance.
Throughout the notice period, the employer and the worker shall be bound to carry out the obligations incumbent on them.
The contracting parties are released from the obligation of giving prior notice under the following cases:
1. For probation or an internship specified in the contract.
2. For a serious offense on the part of one of the parties.
3. For acts of God that one of the parties is unable to meet his obligations.
The following are considered to be serious offenses:
A. On the part of the employer
1. The use of fraudulent measures to entice a worker into signing a contract under conditions to which he would not otherwise have agreed, if he had realized it;
2. Refusal to pay all or part of the wages;
3. Repeated late payment of wages;
4. Abusive language, threat, violence or assault;
5. Failure to provide sufficient work to a piece-worker;
6. Failure to implement labor health and safety measures in the workplace as required by existing laws.
B. On the part of the worker
1. Stealing, misappropriation, embezzlement;
2. Fraudulent acts committed at the time of signing (presentation of false documentation) or during
employment (sabotage, refusal to comply with the terms of the employment contract, divulging
3. Serious infractions of disciplinary, safety, and health regulations.
4. Threat, abusive language or assault against the employer or other workers.
5. Inciting other workers to commit serious offenses.
6. Political propaganda, activities or demonstrations in the establishment.
Pending the creation of the Labor Court, the common court has the jurisdiction to determine the magnitude of offences other than those included in the preceding article.
The employer may find himself unable to meet his obligations in the context of Article 82 - paragraph 3, particularly in the following cases:
1. The closing of the establishment by public authorities.
2. Catastrophe (flooding, earthquake, war) that cause material destruction and make it impossible to resume work for a long time. For death of the employer that causes the closure of the establishment, the workers are entitled to an indemnity equal to that of the notice period.
The worker may find himself unable to meet his obligations in the context of Article 82 - paragraph 3, particularly in the following cases.
1. Chronic illness, insanity, permanent disability;
The cases cited in the first paragraph above, the employer cannot be released from his obligation to give the prior notice.
If a change occurs in the legal status of the employer, particularly by succession or inheritance, sale, merger or transference of fund to form a company, all labor contracts in effect on the day of the change remain binding between the new employer and the workers of the former enterprise.
The contracts cannot be terminated except under the conditions laid down in the present Section.
The closing of an enterprise, except for acts of God, does not release the employer from his obligations as stated in this section III. Bankruptcy and judicial liquidation are not considered as acts of God.
In businesses of a seasonal nature, as per list determined by a Prakas of the Minister in Charge of Labor, the layoff of workers at the end of a work period cannot be considered as dismissal, and does not result in any compensation.
However, the lay-off shall be announced at least eight days in advance by a written notice conspicuously posted at the main entry of each work site, and if applicable, on each boat on which there is a work site.
C. Indemnity for Dismissal
If the labor contract is terminated by the employer alone, except in the case of a serious offense by the worker, the employer is required to give the dismissed worker, in addition to the prior notice stipulated in the present Section, the indemnity for dismissal as explained below:
· Seven days of wage and fringe benefits if the worker's length of continuous service at the enterprise is between six and twelve months.
· If the worker has more than twelve months of service, an indemnity for dismissal will be equal to fifteen days of wage and fringe benefits for each year of service. The maximum of indemnity cannot exceed six months of wage and fringe benefits. If the worker's length of service is longer than one year, time fractions of service of six months or more shall be counted as an entire year.
The worker is also entitled to this indemnity if he is laid off for reasons of health.
Indemnity for dismissal must be granted to the worker and, if applicable, he can also claim damages even though the contract was not terminated by the employer, but the latter, through his evil actions, pushed the worker into ending the contract himself. If the employer treats the worker unfairly or repeatedly violates the terms of the contract, he also has to pay indemnities and damages to the worker.
The termination of a labor contract without valid reasons, by either party to the contract, entitles the other party to damages.
These damages are not the same as the compensation in lieu of prior notice or the dismissal indemnity.
The worker, however, can request to be given a lump sum equal to the dismissal indemnity. In this case, he is relieved of the obligation to provide proof of damage incurred.
When a worker has unjustly breached a labor contract and takes a new job, the new employer is jointly liable for damages caused to the former employer if it is proven that he has encouraged the worker to leave the former job.
Any worker who was engaged to furnish his services may, upon expiration of the contract, demand from his employer a certificate of employment containing primarily the starting date of employment, the date of departure, and kind of job held, or, if applicable, the jobs held successively as well as the periods during which the jobs were held.
The refusal to supply this certificate obliges the employer to pay damages to the worker.
The certificates supplied to workers are exempt form all stamp and registration tax, even if they contain items other than those mentioned in the preceding paragraph, as long as these items do not include any bond, receipt or any agreement liable to ad valorem duties.
The phrase "free from all engagement" and all other terms indicating the normal expiration of a labor contract, the professional qualifications and the services rendered are included in this exemption.
Any harmful statement that could prejudice the employment of a worker is formally prohibited.
Without prejudice to the provisions of Article 91, the damages owed in the case of a breach of the labor contract without valid reasons, as well as those owed by the employer as per provision of Article 89 above, are determined by the competent court and based on local custom, the type and importance of the services rendered, the worker's seniority and age, the pay deductions or payments for a retirement pension, and, in general, on all circumstances that can justify the existence and the extent of the harm incurred.
E. Mass Layoff
Any layoff resulting from a reduction in an establishment's activity or an internal reorganization that is foreseen by the employer is subject to the following procedures:
The employer establishes the order of the layoffs in light of professional qualifications, seniority within the establishment, and family burdens of the workers.
· The employer must inform the workers' representatives in writing in order to solicit their suggestions, primarily, on the measures for a prior announcement of the reduction in staff and the measures taken to minimize the effects of the reduction on the affected workers.
· The first workers to be laid off will be those with the least professional ability, then the workers with the least seniority. The seniority has to be increased by one year for a married worker and by an additional year for each dependent child.
The dismissed workers have, for two years, priority to be re-hired for the same position in the enterprise.
Workers who have priority for re-hire are required to inform their employer of any change in address occurring after the layoff.
If there is a vacancy, the employer must inform the concerned worker by sending a recorded delivery or registered letter to his last address. The worker must appear at the establishment within one week after receiving the letter.
The Labor Inspector is kept informed of the procedure covered in this article. At the request of the workers' representatives, the Labor Inspector can call the concerned parties together one or more times to examine the impact of the proposed layoffs and measures to be taken to minimize their effects.
In exceptional cases, the Minister in Charge of Labor can issue a Prakas (ministerial order) to suspend the layoff for a period not exceeding thirty days in order to help the concerned parties find a solution. This suspension may be repeated only one time by a Prakas of the Ministry.