Unemployment and Termination in Cambodia and the labor laws including unemployment benefits, unemployment claim, unemployment insurance, employment termination payment
What does the law says about unemployment?
Suspension
The employment contract can be suspended for a range of reasons for up to 2 months. While the employment contract is suspended the employer is not required to pay wages and employee is not required to work. At the end of the suspension period, the employment relationship usually returns to normal.
An employment contract may only be suspended for two reasons:
- Disciplinary suspension according to the company’s internal regulations, and
- Serious economic problems of the enterprise, but the suspension must be under the supervision of the Ministry of Labor
Termination of Employment
By law, if an employer wants an employee to stop work, the employer must tell the employee in advance, as following:
|
Type of Contract |
Length of Contract / Employment |
Notice Period |
|
Fixed Duration |
6 months or less |
No notice required |
|
More than 6 months to 1 year |
10 days |
|
|
More than 1 year |
15 days |
|
|
Undetermined Duration |
Less than 6 months |
7 days |
|
6 months to 2 years |
15 days |
|
|
More than 2 years to 5 years |
1 month |
|
|
More than 5 years to 10 years |
2 months |
|
|
More than 10 years |
3 months |
Unemployment Compensation
When an employee is terminated from their job, they are entitled to compensation from their employer. The type and amount of compensation depends on: 1) type of employment contract (fixed duration or undermined duration), 2) reason for termination and 3) if notice was provided to the employee.
Employees with a fixed duration contract are entitled to “severance payment”. Severance payment must be a t least 5% of the total wages paid to the employee during the length of the contract. For example, assume you signed a one-year contract with your employer. If you earned $700 during the year, including your basic wage, overtime and other benefits, then your severance pay should be $35 (5% x $700 = $35).
Employees with an undermined duration contract are entitled to “layoff compensation”. The amount of layoff pay depends on how long the employee has worked for the employer. If worked between 6 months to 1 year, he/she should receive 7 days of wages and benefits. If worked at the enterprise for over 1 year, he/she should get 15 days for each year of employment, up to 6 months wages and benefits. The employer does not have to pay layoff compensation if an employee resigns voluntarily, but must pay if the employer pushed an employee to resign.
The lawful process of termination is summarized in the table below.
|
Type of Contract |
Reason for Termination |
Lawful Termination |
|
Fixed Duration |
At the end of term |
|
|
No notice |
Contract renewed for same term (or undetermined duration if total over 2 years) |
|
|
Insufficient notice |
5% severance + Payment in lieu of notice |
|
|
Sufficient notice |
5% severance |
|
|
Before the end of term |
||
|
By agreement |
5% severance to date of termination, no notice |
|
|
Any other reason |
Wages for full contract + 5% severance |
|
|
Serious misconduct |
5% severance to date of termination, no notice |
|
|
Undetermined Duration |
Serious misconduct |
No layoff compensation, no notice |
|
Economic |
Layoff compensation + notice |
|
|
Other misconduct |
Layoff compensation + notice |
|
What is said in collective agreements about unemployment?
Existing collective agreements do not mention layoff process or compensation, and therefore, provide the same benefits as that stated in the law.