Understand the key elements of employment contracts in Cambodia
In Cambodia, the labor law recognizes two main categories of employment contracts based on their duration: Fixed-Duration Contract (FDC) and Undetermined-Duration Contract (UDC).
A Fixed-Duration Contract (FDC) is an employment agreement that specifies a predetermined end date for the employment relationship. These contracts are suitable for temporary positions, project-based work, or seasonal needs.
The legal source for this information is Article 67 of the Labor Law of Cambodia.
An Undetermined-Duration Contract (UDC), also known as an indefinite contract, is an employment agreement that has no predetermined end date. This is the most common type of employment contract in Cambodia and offers greater job security for the employee.
The legal source for this information is Article 68 of the Labor Law of Cambodia.
An employment agreement in Cambodia should clearly identify both the employer and employee, including their full names, addresses, and identification details. It should specify the type of contract, whether it's a Fixed-Duration Contract (FDC) or an Undetermined-Duration Contract (UDC), and outline the duration if applicable.
The agreement should clearly define the employee's job title, duties, and responsibilities. It should also specify the primary work location, including details on remote work arrangements if applicable.
The contract should outline the employee's gross salary, payment frequency, and any allowances. It should detail any benefits offered, such as health insurance, paid leave entitlements (including minimum annual leave of 1 day per month accrued), and mandatory social security contributions.
The agreement should clearly define standard working hours per day and week, including rest periods, as stipulated by Cambodian labor law (typically 8 hours per day and 48 hours per week). It should establish procedures and compensation rates for overtime work if applicable (overtime pay must be at least 1.5 times the regular wage).
The contract should outline procedures for requesting and obtaining paid leave, including annual leave, sick leave, and maternity/paternity leave as mandated by law.
The agreement should address the ownership of intellectual property created by the employee during their employment.
The contract should outline grounds and procedures for termination by either party, adhering to Cambodia's Labor Law (e.g., providing notice periods). It should specify any required severance pay or compensation due in case of termination (with higher severance for termination without cause).
The probationary period is a trial phase in a Cambodian employment relationship. It allows both employers and employees to assess suitability before committing to a long-term arrangement.
Cambodia's Labor Law establishes the foundation for probationary periods in employment contracts. The maximum duration varies depending on the type of contract:
It's important to note that employers cannot arbitrarily extend the probationary period beyond the legal limits.
The probationary period offers benefits for both employers and employees:
During the probation period, both parties can terminate the contract with a shorter notice period compared to a confirmed employee. Open communication regarding expectations and concerns is crucial for a successful probationary period. Employers should provide adequate training, support, and feedback during the probation to help new hires succeed. By effectively utilizing the probationary period, Cambodian employers can make informed decisions about confirming employees and build a strong foundation for successful long-term working relationships.
In Cambodia, employment agreements may incorporate confidentiality and non-compete clauses to safeguard sensitive company data and potentially restrict competition from former employees. However, understanding the legal context of these clauses in Cambodia is crucial.
A confidentiality clause prevents employees from revealing confidential business information to unauthorized third parties. This could include trade secrets, client lists, marketing strategies, or unpublished inventions.
Key Points:
Legal Source: Although it does not directly address confidentiality clauses, the Labor Law of Cambodia (1997) establishes a general framework for employee obligations.
A non-compete clause limits an employee's ability to work for a competitor or start a competing business after leaving the company.
Legal Considerations in Cambodia:
Alternatives to Non-Compete Clauses:
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