Today I would like to share with you another aspect of probationary period. There is a question whether the parties to an employment contract can agree to have probationary period in their fixed duration contract (FDC). Unless otherwise stated clearly in this text, the articles of law referred herein are those of the Labor Law of Cambodia which has been in force since 1997.
1. Probationary period is only included in undetermined duration contract (UDC)
Regarding this issue of probationary period, there are two main understanding of the application of probationary period. One of which is an interpretation that probationary period can be only included in the undetermined duration contract. UDC is intended for a long-term employment relation. Hence, there should be a rule that allows either party to reserve his or her right to terminate the contract within a certain period at the beginning of the employment relation. For example, the parties entered into an employment contract for an undetermined period. In this contact, there is a section on probationary period during which either the employer or worker can unilaterally terminate the employment contract with or without prior notice. Although the Labor Law does not require party who intends to terminate the employment relation during probationary period to serve prior notice to the other party, in practice, the parties may agree under employment contract or internal regulations of the enterprise to impose obligation to serve notice period at least seven days prior to the termination day.
By the way, probationary period should not be included in the fixed duration contract. The nature of FDC is for short-term employment relation. Pursuant to Article 67 of the Labor Law, the maximum duration of FDC is up to 4 years depending on the duration of the initial employment contract. Based on Article 73 of the same law, unless allowed by the law, FDC can only be terminated by only upon the expiry of the contract. For example, FDC is concluded for a period of one year effective from 02 January 2022 to 31 December 2022. Therefore, FDC can only be terminated at the arrival of the specified ending date of the fixed duration (31 December 2022). In consideration to this nature of FDC, there might be an understanding that FDC should not have probationary period.
2. Probationary period can be included in both FDC and UDC
I have already explain the understanding that probationary period can only be included in the UDC and rejects the use of probationary in the FDC in the above paragraphs. In this part, I further discuss another understanding that parties can agree to have probationary period to be included in either FDC and UDC. Since there is no disagreement that probationary period can be included in UDC, I only discuss the matter of probationary period in the FDC.
We cannot deny the legality of the practice in which the parties include probationary period in FDC for the following reasons. First of all, there is no legal provision in the Labor Law specifically prohibits the parties from having probationary period in their contract. Accordingly, if there is agreement of the parties, probationary period should be used in the FDC as well. Secondly, it is freedom of the parties to use any type of contract (UDC or FDC) to govern their employment relation. For initial contract with fixed duration, especially for those with longer term from 1 years to 2 years, the parties may include probationary period in their FDC. Consequently, it would be deprivation of the employer and worker if probationary period can only be used with the UDC. Probationary period should be included in the FDC.
3. Remarks on probationary period in the FDC
After discussion on the two points of view, there are practices by adopting the second understanding that probationary period can be used for both FDC and UDC provided that the agreement on probationary period is clearly stipulated in the employment contract and the period of probationary period is taken into account when calculating the total period of FDC. For example, the FDC concluded for a two-year period including three-month probationary period should mean 3 months for probationary period and 21 months for definite employment relation with fixed duration. If the parties have three month probationary period and two-year contract, the total length of the contract is 2 years and 3 months. Consequently, the employment relation in this case is under the UDC. (Art. 67)
What is your understanding regarding these two points of view on probationary period? If you happen to see court decisions or arbitral award regarding this issue, please kindly share for my further research.
This text is not a legal advice or legal opinion. Legal advice may varies depending upon specific cases.