Contracts and Dismissals
Written Employment Particulars
The employment 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. An individual employment contract may be of a definite or indefinite period and may be concluded in writing or orally. An employment contract can be written or oral, and may be drawn up and signed between the two parties before commencement of employment. The contract must also be registered at no cost if registration is required. The verbal contract is considered to be a tacit agreement between the employer and the worker under the conditions laid down by the labour regulations, even if it is not expressly defined.
An employment contract is an agreement in which one person (the employee) agrees to work for wages for another person or company (the employer).
Under Cambodia’s Labour Law, employers must engage only Cambodian workers who hold a valid employment card. The card—issued by Labour Inspectors—identifies the worker and records the job, contract term, wages/method of payment, and any changes. Employers must update it for each hiring, dismissal, or wage change and present the entries to the Labour Inspector.
The Civil Code provides that a labour contract must contain a description of the following: wages, working hours, and other working conditions. The term “working conditions” includes wages, hours of work, night work, weekly rest, paid annual leave, public holidays, and special leave. Labour Law requires fixed-term contracts to be in writing. Indefinite-term contracts may be concluded verbally.
Contracts are further regulated through the Decree on Contract and Other Liabilities (No. 38 of 28 October 1988)
Sources: §32-37, 65 & 66 of the Labour Law, promulgated by Royal Order No. CS/RKM/0397/01 of 13 March 1997 (amended in 2021); §664 & 665 of Civil Code, 2007
Fixed Term Contracts
The Cambodian labour Law allows hiring of fixed-term contract workers for tasks of a permanent nature. A contract is a fixed-term contract if it is written, its duration is no longer than 2 years, and it has a precise starting and ending date. A fixed-term contract may be renewed many times; however, the total duration (including renewals) cannot exceed 02 years.
A fixed-duration contract may have an unspecified end date if it is concluded for replacing a worker who is temporarily absent; for work carried out during a season; and for occasional periods of extra work or non-customary activity of the enterprise. Such a contract expires on the return of the temporarily absent employee, the end of the season, and the end of the occasional periods of extra work or non-customary activity of the enterprise. Contracts of daily or hourly workers who are hired for short-term jobs and are paid at the end of the day, the week or fortnight are considered to be contracts of fixed duration with an unspecified date. The contracts without a precise end date can be renewed as many times as possible until the objective condition (for signing them in the first place) remains.
Employer is required to inform the worker of the sensitive issues and the approximate duration of the employment contract. A fixed-duration contract must be in writing; otherwise, it is considered a contract of indefinite duration. If a fixed-term contract is signed for a period of less than two years, however, the worker continues to work after the end of that fixed period, the employment contract is changed into a contract of indefinite duration.
Sources: §67 & 73 of the Labour Law, promulgated by Royal Order No. CS/RKM/0397/01 of 13 March 1997 (amended in 2021)
Probation Period
At the beginning of an employment contract, the employer can set a probationary period of up to 3 months in order to evaluate the skills and aptitude of an employee.
The probationary period should be long enough to judge the professional worth of the worker and for the worker to know completely about the working conditions at the workplace. The maximum duration of the probationary period as specified by the law is: - 3 months for regular employees; - 2 months for specialised workers; and - 1 month for non-specialised workers (unskilled workers).
The law does not allow a probationary period to go beyond the maximums specified under the law.
During probation, the employer must cover the travelling costs of the worker employed far from his/her residence. An employment contract can be terminated by either of the parties without giving any notice during the probationary period or an apprenticeship period specified in the contract.
Sources: §68 & 82 of the Labour Law, promulgated by Royal Order No. CS/RKM/0397/01 of 13 March 1997 (amended in 2021)
Termination of Employment
The Cambodian Labour Law recognises the following types of contract termination.
1. Expiry of a fixed-duration contract
2. Early termination of a fixed-duration contract by mutual agreement, force majeure, or gross misconduct
3. Termination of an indefinite term contract with notice (for a valid reason)
4. Termination without notice
5. Termination due to the closure of the enterprise or the death of the employer
6. Mass layoff (collective redundancy)
7. Voluntary resignation by the worker for a valid reason, such as illness or disability
Under Cambodia’s Labour Law, any termination of an unspecified-duration contract must be grounded in a “valid reason” related to the worker’s aptitude or behaviour, or to the enterprise’s operational needs, and such terminations require prior written notice unless an exception applies (probation, serious offence, force majeure).
According to the Labour Code of Cambodia, an apprenticeship contract may be terminated due to the death of the instructor or apprentice, or if one of them is obligated to serve in the army, imprisoned, or on the closure of the workshop or enterprise.
An apprenticeship contract may be terminated by either party in cases of non-compliance with the contract, serious or repeated violations of legal provisions, persistent disregard of internal regulations, or if the instructor relocates to another commune. Termination without a valid reason entitles the affected party to claim compensation.
A fixed-term contract may be terminated automatically at its specified time; it may, however, be terminated earlier by mutual agreement before a labour inspector, or unilaterally in cases of serious misconduct or force majeure.
An indefinite term contract may be terminated at the will of either party, provided that valid reasons exist relating to the worker's aptitude, behaviour, or the operational needs of the enterprise, and that the required notice periods are observed.
Collective Dismissals
Employers must determine the order of layoffs based on workers' professional qualifications, seniority, and family burdens. Workers' representatives must be consulted, and the labour inspectors must be informed of the process. Dismissed workers are granted priority for re-hiring within 2 years. In exceptional cases, the minister of labour may suspend planned layoffs for up to 30 days by ministerial order.
Gross Misconduct
On the employer's part, fraudulent inducement to sign a contract, refusal or repeated late payment of wages, abusive behaviour, and failure to implement health and safety measures
On the employee's part, it includes theft, fraud, sabotage, serious breach of discipline, violence or threats, incitement of the workers, and political propaganda in the workplace.
Unfair dismissal and remedies
Dismissals without valid reasons are considered unfair. If an employer forces a worker to resign through wrongful conduct, this is treated as constructive dismissal, and the worker is entitled to dismissal indemnity and damages.
Remedies include payment instead of notice, dismissal indemnity, and damages for unjustified termination. The labour court, once established, or the common court has jurisdiction to determine compensation.
Labour Law allowed damages for unjust firing, but the amounts were not clearly quantified before. In 2024, the Ministry of Labour and Vocational Training issued the Notification on Compensation for Terminating an Employment Contract, which clarifies the damages if an employer dismisses a worker without a valid reason (and without serious misconduct). For fixed-duration contracts, the damages mean the wages the worker would have earned for the remainder of the contract term. In case of indefinite term contracts, damages are equal to the sum of all seniority payments received during employment (effectively 15 days’ pay per year of service) as a one-time severance grant.
Source: §63, 64, 73-95 of the Labour Law, promulgated by Royal Order No. CS/RKM/0397/01 of 13 March 1997 (amended in 2021); MLVT Notification on the Compensation for Terminating an Employment Contract, 21 March 2024
Regulations on Employment Security
- Labour Law, promulgated by Royal Order No. CS/RKM/0397/01 of 13 March 1997 (amended in 2018)
- Prakas No. 248 K.B/Br.K
