Cambodia: Labor Contractor

In the operation of their enterprises as well as business activities, entrepreneurs may use their own workers or the labor contractor or both. This article briefly discusses rules governing labor contractor and relationship among entrepreneur, labor contractor and worker of the contractor.

According to the Labor Law of Cambodia, the labor contractor refers to person who gets works or assignments from the entrepreneur and who himself or herself recruit workers as needed to carry out work or provide any service for a total price. (Article 45) A labor contractor must comply with the labor laws as anormal employer does. He or she must not exploit or underestimate the labors of the workers by paying less to theirworkers. (Articles 46 and 47)

A labor contractor may be a natural person or a legal entity. Most of labor contractors are the service providers, in particular providing labor forces to entrepreneurs by sending or dispatching their own workers to work directly for entrepreneurs. That is, a person is defined as a labor contractor of the entrepreneur if such person has entered into the contract providing labor forces to the entrepreneur and that person has entered into employment contracts directly with the workers who provide service or labor directly to the entrepreneur. Entrepreneur, on the other hand, doesnot enter into direct employment contracts with the workers, but workers work directly for entrepreneur through their employment contracts with the labor contractor. (Case No. 039/17, Arbitration Council)

The remarkable relations between the entrepreneur and the labor contractor is that the entrepreneur is held accountable instead of the labor contractor in the event that the labor contractor does not fulfill the obligations in favor of his or her workers. According to Article 48 of the Labor Law, in cases where the labor contractor does not have money to pay the workers or in case where the labor contractor does not fulfill all the obligations, the entrepreneur or the manager of the enterprise must take the place of the labor contractor to fulfill the obligations towards the workers. In cases where the worker is harmed, the worker can sue the entrepreneur directly.

Clause 11, paragraph 2, of the Inter Ministerial Prakas dated 11 October 2017 on the implementation of health care through the health equity fund system for informal workers and the provision of additional allowances for female workers during childbirth, which is issued by Ministry of Labor and Vocational Training, the Ministry of Economy and Finance, and the Ministry of Health, require all labor contractors to register their workers in the National Social Security Fund (NSSF) in order for the workers to receive health care and maternity allowances. Clause 11 of the same Prakas also stipulates that in cases where the labor contractor fails to fulfill this obligation, the entrepreneur or the owner of the enterprise which has entered into a contract with the labor contractor must take the place of the labor contractor to fulfill the duty to register the workers recruited or employed by the labor contractor.

The requirement that the entrepreneur be accountable on behalf of the labor contractor who does not perform the obligations toward his or her workers can be a mechanism that protects the interests of workers in order to prevent entrepreneurs from evading liability under labor laws through the use of labor contractor instead of employing workers. In order for workers to know that their employer is labor contractor of an enterprise, and for workers to seek entrepreneurs, Article 49 of the Labor Law requires that the labor contractor indicate his or her status, the name and address of the entrepreneur, by affixing this information to accessible place, such as workshop, storeroom or work where work is performed.

Entrepreneurs, on the other hand, must regularly maintain the list of the labor contractors they have contracted with. This list must include the name, address and status of the labor contractor, as well as the status of each workplace. Entrepreneurs must submit this list to the Labor Inspector within 7 days after the date of the contract with the labor contractor. In the case of agricultural enterprises, the entrepreneur must submit this list to the Labor Inspector within 10 days after the date of the contract with the labor contractor. (Article 50)

In conclusion, the labor contractor has the legal status as the employers of workers who are recruited by the labor contractor and who have been assigned to work for the entrepreneurs. In cases where the labor contractor fails to perform its obligation toward the workers, the entrepreneur will be held accountable for the worker instead of the labor contractor.

Categories Employment and Labor Laws

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