Legal Updates for June 2019

Guideline on the Determination of Types of Employment Contracts

There are two types of employment contracts under Cambodian Labour Law (“Labour Law”): the undetermined duration contract (“UDC”) and the fixed duration contract (“FDC”). Article 67 of the Labour Law provides that an FDC shall contain a specified ending date and cannot be made for a period longer than 2 years.  It can be renewed many times, as long as the renewal does not surpass the maximum duration of 2 years.

The interpretation of this provision is debatable. One school of thought holds that an FDC can be renewed as many times as the parties wish as long as each or all renewal does not exceed 2 years, while another one affirms that an FDC shall become a UDC when the total duration of the contract including the renewal exceeds 2 years.

To clarify the controversial interpretation of Article 67 of the Labour Law, the Ministry of Labour and Vocational Training issued Guideline No. 050/19 LV/N.MLVT on 17 May 2019 concerning the determination of the two types of employment contracts (“Guideline”). This update sets out the key features of the Guideline.