• Closing establishment/enterprise: According to Article 87 of the Law on Amendment to Labor Law, the closing of the establishment/enterprise does not require the employers to pay employees any damages or compensation for prior notice. However, under the previous Article 87, the closing of an enterprise, except for force majeure, does not release the employer from his obligation as stated in section 3 of the Labor Law 1997 including prior notice.


• Suppression of indemnity for dismissal: The Law on Amendment to Labor Law eliminated indemnity for dismissal and replaced another requirement for employers to pay seniority indemnity which is equal to 15 (fifteen) days per year of a sum of wages and other payments. Every six months, the employer shall pay the employee half of seniority bonus. If Unfixed Duration Contract (UDC) is terminated by the employer following the Labor Law, the employer is required to grant the employees whose remaining seniority period from 1 month to 6 month seniority equals to 7 days of a sum wage and other payment. The seniority payment is also applicable for the termination due to illness.


• Seniority Payments under Article 89 (New): Under the term of the said article, the employee, who is working, is entitled to receive the severance which equivalent to fifteen (15) days of wage and fringe benefits for each year of service from their employer. Referring to the Article 2 of Law on Amendment to Labor Law, the calculation and payment of the indemnity of the employee, who has worked before the entering into force of this law, shall be implemented according to the determination of the Prakas of the Ministry of Labor and Vocation Training (“ MLVT”).
  
  Shortly after enact of the Law on Amendment to Labor Law, MLVT recently issues a Prakas No. 443 on Seniority Payments dated 21 September 2018 (“ Prakas No. 443”). This Prakas No. 443 will take effect from 1 January 2019 and clarifies the scope and enforcement of the relevant provision on seniority payment for employees under UDC. The said Prakas shall be applied to all enterprises under the scope of the Labor Law 1997 (including non-governmental organizations, associations and private sector entities).
  
  It is to note “ Severance or Indemnity for dismissal” was previously payable only upon termination of UDC by an employer, except for serious misconduct committed by an employee. From 2019, seniority payments replacing the “ severance” must be paid to employees under UDC every 6 months.

This information contained herein has been prepared for general informational purposes only and shall not constitute legal, accounting, tax, career or other professional advice of any kind. If you would like further information regarding the above or would like to discuss these issues, please contact us: info@hml.com.kh.