Today I wish to share my view on oral or verbal employment contract based on the laws of Cambodia. In particular, I am going to discuss two questions in this text. Is oral employment contract valid and binding? What are the legal implications of oral employment contract?
Pursuant to general rule of contract formation under Article 336 of the Civil Code of Cambodia, the contract is formed and effective because the offer of a party matches the acceptance of the other party. The Code further provides an exception to the general rule by requiring the parties to make the contract in the form of notarized document if one of the parties has the obligation to transfer ownership right over the immovable property or has the obligation to acquire right of ownership over the immovable property.
Based on the above rules, employment contract is not required to be in the form of notarized document or written contact as long as the offer conforms to the acceptance.
These rules of the Civil Code are in line with those stipulated in the Labor Law. For example, Article 65 of the Labor Law provides that employment contract is subject to ordinary law and can be made in a form which is agreed by the contracting parties. The employment contract can be written and verbal. The verbal contract is considered to be a tacit agreement between the employer and the worker under the conditions laid down by the labor regulations although it is not expressly defined.
Accordingly, a verbal or oral employment contract is legally accepted as a valid and binding agreement under the Labor Law of Cambodia. The parties can just verbally agree to the main terms such as wages and duties (scope of work) and let other general working conditions, including working hours, rest hours, leaves, disciplinary measures, health and safety, insurance, and other benefits to be governed by the laws and regulations governing employment and labor regulations.
2. Legal implications
Although verbal employment contract is valid under the laws, it has some legal implications I wish to highlight below in this text.
Firstly, verbal contract is undermined or indefinite duration employment contract. Pursuant to Article 67 of the Labor Law, fixed-term contract must be in writing. Failing which, the contract is considered as undetermined duration contract. Hence, the parties need to have written contract if they wish to be bound to employment relation under the fixed-term contract.
Secondly, contract of the employer and worker for agreement to terminate fixed-term contract before the expiry date must be made in writing and signed by both parties in the presence of labor inspector. (Article 73, Labor Law) Verbal agreement on the termination fixed-term contract is not a valid contract.
Thirdly, probationary contract or clause of probationary period which is made in verbal is not a valid and binding agreement. This is because probationary contract is not required by the law, but it depends on the parties to have or not to have probationary period. If they agree to have probationary period but fail to conclude a written contract for this purpose, their employment relation is not under probationary period but under defined employment relation of indefinite duration contract. In short, there is no probationary period.
In conclusion, verbal or oral contract is valid under the laws of Cambodia, but such contract has some implications on the type and validity of the contract.
This text is not legal advice or opinion.