On 21 March 2024, the Ministry of Labour and Vocational Training of Cambodia (“MOLVT”) has issued a notification on the benefits employees shall receive upon the termination of their employment contracts.

Objective

The notification aims to prevent misinterpretations of the Labor Law and related regulations on the entitlement of the employee’s termination benefits.

1. Termination Without Cause

• Fixed Duration Contract (FDC): Benefits include unpaid wages, payment in lieu of remaining unused annual leave, severance pay of at least 5% of wages paid during the contract period, and damages equal to the salary the employee would have earned until the end of the contract.
• Undetermined Duration Contract (UDC): Employees are entitled to unpaid wages, payment in lieu of remaining unused annual leave, compensation in lieu of notice if not previously given, seniority payments for any semester in which they are dismissed, and a dismissal indemnity equal to the seniority payments received throughout their employment.

2. Termination With Cause: an employee is terminated for committing serious misconducts.

An employee is entitled to unpaid wages and payment in lieu of remaining unused annual leave, regardless of the contract type.

3. Employer’s Bankruptcy.

In cases of bankruptcy, employees are entitled to a distinct set of benefits that do not include damages. This approach reflects an understanding that bankruptcy is an event beyond the control of both employers and employees, thus does not affect an employee's honor or dignity.