Can the parties insert a clause in their employment contract which allows either employer or employee to terminate the fixed duration contract before the expiry date? In this text, I am going to share my personal opinion on this question based the laws of Cambodia.
Based on Article 414 of the Civil Code of Cambodia, the parties to a contract may agree under the contract that either one or both of the parties must be given a right of termination. According to this general rules regarding termination of the contract, it seems that the employer and employee can agree to allow either one of them to unilaterally terminate the employment contract before the expiry date. However, since employment relation is unique and different from the normal civil relation, it is quite common that we need to check and consult with the Labor Law of Cambodia before we can say whether or not the general rule of contract termination applies to the above question.
With respect to termination of fixed duration contract, the Labor Law of Cambodia, in particular Article 73, provides that fixed duration contract normally expires at the precise finishing date and pre-mature termination of this contract is allowed by the Labor Law only if employer and employee agree on termination in writing in the presence of Labor Inspector, if employer or employee committed serious misconduct or if there is an act of God.
Pursuant to above provision of the Labor Law, fixed duration contract can be terminated by the mutual agreement. However, to ensure the real and free agreement of the parties without any defective declaration or expression of intention, the Labor Law further requires the agreement on termination be in writing and signed by the parties in the presence of the Labor Inspector. Consequently, I personally view that even though the parties confirm their agreement in advance in the contract to allow either employer or employee to unilaterally terminate the contract before the expiry date, it is more likely that at anytime just before the effective date of termination, both employer and employee are still required to sign the agreement on termination and witnessed by the Labor Inspector.
In conclusion, a clause in the employment contract allowing unilateral termination of contract before the expiry date would not be effective if the agreement on premature termination of the contract need to be agreed and signed by both parties in the presence of the Labor Inspector.
This text is not legal advise or opinion.