Cambodia

Fixed Duration Contracts: Cambodian Labour Law recognises three grounds for terminating a fixed duration contract before the end date without a severance payment:

• Mutual agreement - A termination by mutual agreement between the employee and the employer must be made in writing. Prior notice is not required.

• Serious misconduct - An employee can be terminated immediately if the employee commits an act of serious misconduct. The statutory deadline for employment termination on grounds of serious misconduct is seven days from the time the employer became aware of the employee's misconduct. Prior notice is not required.

• Force majeure - An unforeseen event of force majeure (like a flood or an earthquake) that prevents the worker from fulfilling their obligations under the FDC. Prior notice is not required in this instance.

If one of the above reasons do not apply to the termination, the employer is legally obligated to pay severance to the employee on termination.

Undetermined Duration Contracts (UDC): Cambodian employment law recognises two grounds for terminating a UDC without notice and without payment of damages:

• Serious misconduct: An employee can be terminated immediately if the employee commits an act of serious misconduct. Termination for this reason must take place within seven days from the time the employer became aware of the employee's misconduct. Prior notice is not required.

• Force majeure: In the event of an uncontrollable situation (like a natural disaster) which prevents a worker from fulfilling their obligations under the UDC, the agreement can be terminated without prior notice.

Otherwise, a UDC can be terminated by either party provided:

• Due notice of the termination is given in writing and the employer has a valid reason for terminating the employee (examples includes deficiencies in the employee’s aptitude or behaviour, or business operation requirements of the employer) and the employer will not have to pay damages in this case

• If the employer does not have a valid reason for terminating the employee, the employer can still terminate the employee so long as the employer pays applicable damages required by Cambodian law outlined below.

The notice period varies based on the duration of employment as well as the type of employment contract.

• Fixed Duration Contract (FDC) - FDCs cannot be terminated prior to the expiration date (unless the employer wants to pay out for the entire period of the contract), and the below notice periods relate to giving the employee notice that the contract will not be renewed and will terminate.

• 6 months or less: no notice required

• More than 6 months 10 days

• More than one year: 15 days

• Undetermined Duration Contract (UDC)

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Like stated above, payments can be made in lieu of notice and workers who have been notified of their pending termination are entitled to take two paid days off per week (during the notice period) for a job search.

Severance payments under Cambodian law depend on the nature of the contract between the employer and the worker and are only required if an employee is dismissed without cause.

Workers employed with a fixed duration contract are entitled to:

• Severance Payment: A severance payment equal to at least 5% of the wages paid to the employee during the length of the contract. This is calculated by collecting the sum of the total wages, including bonuses, paid during the course of the contract. This sum is multiplied by 5% to determine the amount of the severance payment

• Unused Annual Leave: Unpaid annual leave through to the termination date must be paid out in full

• Other Benefits: Any other benefits agreed to between the employer and the employee in an employment contract, internal work rules, employee manual/HR handbook or collective bargaining agreement, if any.

If the employee is terminated before the expiration date of the employee's contract, the employee is also entitled to the following payment:

• Damages: Damages for being laid off before the expiration date should equal the wages the employee would have received had they completed the original contracted term.

There is no compulsory obligation to provide probationary periods when engaging new employees. Many employers do choose to impose a probationary period and this is expected by employees.

The probationary period does have some stipulations if applied:

• cannot last longer than three months for regular employees

• two months for specialised workers

• one month for non-specialised workers

Whether an employee is a specialised worker or otherwise must be decided on a case-by-case basis depending on the level of professional skills required by the job in question. No prior notice is required to terminate the probationary period, either during or at the end of its intended duration.