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The Cambodian Labour Law: A Comprehensive Guide (2014 & Beyond)

Key Requirement (2014): All contracts must be in writing if for more than one month. Failure to produce a written contract presumes an Undetermined Duration contract in favor of the employee. Cambodian-labour-law-guide-english-2014

  • Severance pay: 5% of total wages earned during the contract period (for UDT) plus 15 days per year of service (in lieu of notice if notice not given).
    1. The Seniority Payment (Indemnity): This was the most misunderstood clause. Unlike Western severance, the 1997 law mandated a seniority payment of 15 days’ wage per year of service, payable either upon termination or annually. The 2014 guide explained the loopholes: many employers paid it "monthly" as a 7.5% wage premium to avoid a lump sum later.
    2. The Fixed-Duration Contract (FDC) Trap: While most roles are undetermined-duration contracts (UDC), the guide warned that FDCs (common for projects) automatically convert to UDCs after two consecutive renewals. Terminating a converted UDC without cause became a costly mistake.
    3. Seniority Ranking & Medical Leave: The guide detailed the "seniority bonus" (a separate concept from the indemnity) and the strict schedule for sick leave—from 100% pay for the first month down to 50% for the third month.
    4. Union Pluralism: Cambodia allows multiple unions in a single workplace. The 2014 guide provided crucial flowcharts on how to calculate the "internal union committee" elections, a political minefield for factory owners.
    1. Minimum wage: Set by the government, currently USD 170 per month for workers in the garment, footwear, and travel industries, and USD 153 per month for workers in other industries.
    2. Payment frequency: Wages must be paid at least once a month.
    3. Allowances: Employers may provide housing, food, and transportation allowances.

    While a general minimum wage for all sectors has been a topic of debate, the Royal Government of Cambodia primarily regulates the minimum wage for the garment, footwear, and travel goods sectors. The Cambodian Labour Law: A Comprehensive Guide (2014

    8. Trade Unions and Collective Bargaining (Chapter XII)

    Cambodia has a highly unionized workforce, especially in garments. Severance pay: 5% of total wages earned during

    Probationary Contract: Cannot exceed:

    Termination without Serious Cause (Economic or Disciplinary)

    • Notice period (UDT contracts):