O ne contract that will affect virtually everyone's life at one time or another is
the employment contract. This form of contract governs the relationship between workers
and their employers. Employment contracts must be tailored to the particular needs
of the parties. There are, however, certain general subject areas that will be covered
in most agreements. These include the duration of the employment, provisions for
termination of the agreement, the compensation and benefits that will be provided
and the duties and responsibilities that will be assigned to the employee.
It is generally recognized that employment contracts provide considerably greater
protection for the employee than for the employer. In part, this attitude exists
because courts generally refuse to force a person to perform against that person's
will. Consequently, if the employee quits before the expiration of the employment
term, the employer could not successfully petition a court to order the employee
to continue working involuntarily although they may be awarded damages for actual
losses caused by the departure of the employee. On the other hand, if the employer
fires the employee before the expiration of the agreement the employee may often
recover the compensation he or she would have received had he or she been allowed
to perform the agreement, unless the employer can prove good cause for termination.
The draft Cambodian Labor Law contains a full chapter outlining the requirements
and limitations of employment contracts in the Kingdom. Written contracts are not
required in order to establish an employment relationship. One will be implied if
the circumstances surrounding the relationship between the parties justifies such
an implication. According to the draft law, the term of an employment contract may
either be for a fixed duration, a specific project or for an indefinite time. No
employment contract may be for a fixed duration of longer than two years, though
it may be renewed. Any contract that purports to be for a period of longer than two
years or in which the work continues past the initial fixed period of the contract
will be treated as one for an indefinite time. Probation periods are limited to a
maximum of three months.
For employment contracts of a specified duration, termination will normally occur
at the specified ending date. It can, however, be terminated before the ending date
if both parties are in agreement and that agreement is reduced to writing and signed
in the presence of a labor inspector. Without such agreement, fixed duration employment
contracts may only be terminated for serious misconduct or "Acts of God"
(flooding, earthquake, war).
Serious misconduct on the part of an employer include the following: refusal to pay
all or part of the salary, repeated late payment of salary, threat, abusive language,
violence or assault, fraud and neglecting to provide adequate health and safety measures
in the work place. For employees serious misconduct is defined as including: stealing,
embezzlement, breach of professional confidence, fraud, serious infractions of disciplinary,
safety or health regulations, threats, abusive language or assault, inciting other
workers to serious misconduct, and political activities within the work place.
The closing of a business for reasons other than Acts of God does not release employers
from their obligations to compensate their employees. The draft law specifically
excludes bankruptcy and liquidation from the definition of "Act of God".
If an employer fires an employee that has not committed serious misconduct and without
the existence of an Act of God prior to the expiration of the contract term, the
employee will have a right to claim compensation for their lost wages during the
remainder of the contract. Employers have the right to claim damages from an employee
who quits prior to the end of the fixed term contract.
When a contract approaches its expiration date, an employer must give notice to the
employee and inform them whether the contract is to be renewed. The amount of notice
that the employer is required to give varies from ten to fourteen days depending
on the original length of the contract. On contract termination, the employer must
compensate the employee in an amount proportional to the salary and length of the
original contract. The draft labor law sets a minimum compensation at five percent
of the wages paid during the length of the contract.
Employment contracts of unspecified duration may be terminated by either of the parties
by giving written notice in advance. The notice period requires varies from seven
days for employees who have worked for the business for less than six months to three
months for employees who have been employed for more than ten years. If the required
notice period is not given by an employer, they must compensate the employee for
the wage that would have been earned during the notice period. During the notice
period, the employee has a right to two days of paid leave per week in order to look
for new employment.
- Michael Popkin is an attorney with Dirksen, Flipse, Doran & Le, an international
law firm with regional offices in Vientiane, Phnom Penh and Ho Chi Minh City.