Today I would like to share my opinion with respect to the question as mentioned above. This question relates to the termination of fixed duration contract (FDC) before the arrival of the specified ending date.
For example, an employment contract is concluded for a period of one year from January 1, 2021 to December 31, 2021. The parties to the contract, employer and employee, include a clause in their contract under which either employer or employee is prohibited from terminating the fixed duration contract before the expiry date. That means that either party cannot terminate the FDC before December 31, 2021.
Pursuant to Article 73 of the Labor Law of Cambodia of 1997, fixed duration contract expires at the specified finishing date. The contract can be terminated before the expiry date only if there is any of the following 3 reasons:
- there is a mutual written agreement on termination of the contract before the expiry date, which is signed by employer and worker in the presence of Labor Inspector;
- there is an event of act of God;
- either employer or employee committed serious misconduct.
Furthermore, Article 73 provides that the termination of the FDC at the initiative of employer before the expiry date without any reason mentioned above entitles the employee to damage equal to wages the employee would have received until the expiry date of the contract. The unilateral termination of FDC by the employee without any reason mentioned above entitles the employer to damage equal to the amount corresponding to the damage sustained.
In consideration to the above provision, in particular Article 73 of the Labor Law, it is interpreted that the clause of the employment contract that prohibits either employer or employee to unilaterally terminate the contract before the expiry is valid. However, even though there is such a clause in the contract, if there is any of events such serious misconduct of either party or act of God, either employer or employee can unilaterally terminate the contract before the expiry date.
This text is not legal advice or opinion.