Can an employer unilaterally change working conditions or the content of an employment contract? This article will answer to this question based on the laws of Cambodia.
1. Change of working conditions through the principle of consent
Article 311 of the Civil Code states that a contract is the act of two or more persons who agree to create, modify or cancel the obligation. Based on the principle of consent in the said provision, change of working conditions or content of the employment contract is effective only if such change is agreed by all parties, that is, the employer and the worker. Change in working conditions which provides better benefits to worker is more likely accepted by the worker.
To avoid worker’s refusal on proposed change of working conditions during the course of employment relation, employer may reserve his or her right to do so in the employment contract. That is, the employer can unilaterally revise the working conditions through the inclusion of clauses in the employment contract providing employer with right to change certain working conditions. For example, the employment contract specifies the work place of the worker together with the right of employer to change the workplace based on the need of the operation and requirement of business.
2. Change of working conditions through employer’s right to manage and direct the enterprise
There might be cases where the employment contract fails to have clause that authorizes the employer to unilaterally modify the working conditions. In such cases, can employer alone change terms and conditions of the employment contract? Does the employer need to get consent from the worker? The answer is that to some extents the employer can do so through exercising his or her right to manage and direct the enterprise. I will further discuss such employer’s right below.
Under the employment relation, a worker performs his or her duties under the management and direction of his or her employer. This management and subordination relation is stated in Articles 2 and 3 of the Labor Law of Cambodia. Article 2 of the Labor Law provides that all natural persons or legal entities, public or private, are defined as employers who establish enterprises within the meaning of the Labor Law if they have one or more workers, even if intermittently. Each enterprise can have many establishments, and each establishment has a group of people working together in a certain place, such as in a factory, workshop, etc., under the management and direction of the employer. Article 3 of the Labor Law states that workers within the meaning of the Labor Law are persons of all kinds and nationalities who have entered into a contract to receive wages under the management and direction of another person, either a natural person or a legal entity, public or private person.
To ensure the operation of the enterprise and to protect the will or autonomy of the individuals, there should be a compromise or adjustment between the principle of consent and the employer’s right to manage and direct the enterprise. That is, an employer may unilaterally amend an employment contract based on his or her rights under the Labor Law, as long as the employer exercises this right in good faith and does not abuse this right beyond the scope of the protection. (Article 4 and Article 5 of the Civil Code) As an interpretation, the exercise of the right of the employer, which affects the interests of the workers provided by the laws or the previous agreements, without reasonable cause, is a violation of the principle of good faith and honesty, and is an abuse of right.
In resolving collective labor disputes, the Arbitration Council sets the rule that the right to manage and direct is the right of the employer, but prohibits the exercise of rights that lead to (1) wage reductions, (2) relocation of the workers to work far away from the previous workplace, (3) change of work shifts from day to night or vice-versa (4) excessive changes in the main skills of workers. If employer changes any of these 4 conditions, it is considered that employer violates the employment contract. (Case No. 17/03 and 18/03) Therefore, the employer must exercise this right legally and reasonably, that is, not to affect any of the above working conditions.
However, it is noted that the reasonableness of the exercise of right to management and direction is also judged on case by case basis. For example, it should be reasonable for the change of workplace which is made for temporary work assignment with additional benefit and allowance for accommodation and transport expenses. (Case 61/09) With respect to the change of simple skill which can be easily changed, it should be reasonable if the employer provides the worker with opportunity for training and education on the new skill.
3. Change of working conditions through change of internal regulations
There are also cases where employer can unilaterally change the working conditions through the change of the internal regulations. That is, the employer can state the specific agreements regarding working conditions, such as works to be performed, period of employment relation, working hours, wages, place of work and leaves in the employment contract while referring the general working conditions to those stated in the internal regulations of the enterprise. The parties may need to include clause in the contract saying that the terms and conditions of the internal regulations are integral part of the employment contract. Since the internal regulations are prepared and drafted by the employer, notwithstanding the requirement of consulting with the shop steward (workers’ representatives) and obtaining a visa from the Labor Inspector, we can say that the employer can unilaterally modify the working conditions through change of internal regulations.
In conclusion, change of working conditions or content of employment contract need to have consent of both parties to the employment contract. In case where there is no such agreement, employer may do so through the exercise of his or her right in management and direction of the enterprise or through the change of internal regulations as mentioned above.
This article is not legal advice or opinion.