Cambodian Labor Law: Termination of Employment at Retirement Age

In Cambodia, there is no law determining compulsory retirement age for workers under employment relations-contractual relations between employers and workers. Can employers set the retirement age for their workers? Can old age or reaching retirement age be considered a legal ground for dismissal? This short article aims at discussing on this matter.

The 1997 Labor Law of Cambodia does not have provision on the compulsory retirement age for workers. The 2002 Law on Social Security Schemes for Persons Defined by the Provisions of the Labor Law only entitles workers to get old age pension when certain conditions have been fulfilled. For example, its Article 8 (para. 1) provides that each NSSF member who is 55 years of age is entitles to old age pension provided that he or she has been registered in NSSF in a period of at least 20 years and paid in contribution at least for 60 qualifying months for Social Security Schemes during the period of least 10 years up to the date of eligibility of the pension. The same law also provides conditions for the case of early retirement. However, the same law does not clearly state that the age of 55 is a compulsory retirement age and valid reason for termination of employment of the worker who reaches this age.

In practice, most of the employers determine retirement age (55 or 60) in their internal regulations. Is reaching retirement age a valid ground for dismissal? Under the Labor Law, dismissal can be made in accordance with Article 74 which provides that the employment contract of unspecified duration can be terminated at will by one of the contracting parties. This termination shall be subject to the prior notice made in writing by the party who intends to terminate the contract to the other party. However, no dismissal can be taken without a valid reason relating to the worker’s aptitude or behavior, based on the requirements of the operation of the enterprise, establishment or group.

According to above rules, dismissal of a worker on the ground of his/her elder age or reaching the retirement age is not a valid dismissal if the employer cannot prove the poor capacity of such worker. Consequently, the dismissed workers are entitled to seniority payment pursuant to Article 89 (new), compensation for damage in Article 91 (new) of the Labor Law and other benefits/entitlements as provided by laws and regulations.

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