Update on the total length of employment relation under the fixed-duration contract

Article 67, paragraph 2, is one of contract transformation rules stipulated in the Labor Law of Cambodia, adopted in 1997 and amended twice in 2007 and 2018. This rule has been in dispute due to different interpretations on the total length of employment relation under the fixed-duration contract (FDC). Some say that the maximum length of employment relation under FDC is 2 years, some say 4 years, and some say indefinite period as long as each period of contract is not more than 2 years. Recently, the Ministry of Labor and Vocational Training issued an Instruction on Determination of the Types of Employment Contracts dated 17 May 2019 which also includes the clarification on the implementation of Article 67, paragraph 2. This article briefly discusses on this rule.

Article 67, paragraph 2, reads ”The labor contract signed with consent for a specific duration cannot be for a period longer than two years. It can be renewed one or more times, as long as the renewal does not surpass the maximum duration of two years.” Pursuant to the said Instruction, the initial term of the FDC cannot be longer than 2 years. If FDC is renewed once or more times and has total period longer than 2 years, the contract will be automatically transformed to undermined duration contract (UDC). For example, the initial term of FDC is 6 months, then the total duration of FDC is 2 years and 6months. If the initial term is 1 year, then the total duration is 3 years. If the initial term is 2 years, then the total duration is 4 years. Accordingly, the total length of FDC including its initial and renewal(s) can be up to the maximum period of 4 years.

Furthermore, the said Instruction makes it clear that if the FDC has reached the maximum period as allowed by the law, the employer may conclude FDC with the same worker for similar or same work as long as there is a break period for at least one month between the precious FDC which has just expired and new FDC. If not, FDC will be converted to UDC. Based on the above rule, for example, the initial term of FDC is 2 years. After the expiry of this FDC, there is no employment relation between the employer and worker. After one-month period of break of relation, the said employer signs FDC with the same worker for the similar or same work for the period of 2 years. Then, after one-month period of break of relation, the employer and the worker sign FDC for a period of 2 years. In this case, the employment relation is under FDC.

(See Instruction on Determination of the Types of Employment Contracts dated 17 May 2019 of the Ministry of Labor and Vocational Training for more detailed explanation)

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2 thoughts on “Update on the total length of employment relation under the fixed-duration contract

  1. Thanks

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