[Cambodia] Summary of labour law amendments

On October 5, 2021, Cambodia’s government issued Royal Kram No. NS/RKM/1021/011 which amends several articles of the Labor Law, Khmer Times summarises the changes and their impact.

The Labor Law was first promulgated in 1997 and has since undergone two amendments, first in 2007 concerning wages for overtime and then in 2018, regarding provisions on seniority indemnity.

The latest changes include allowing enterprises to divide scheduled work hours into three shifts, and the provision that individual labour disputes can now be brought to court if the disputing parties cannot settle with the labour inspector.

The Cambodian government hopes the latest changes can strengthen the competitiveness of the country’s labour market, especially as it intends Cambodia to reach middle-income status by 2030 and high-income status by 2050.

The labour law amendments are reportedly likely to require employers to change the terms and conditions on employment contracts and internal regulations related to work shifts and public holidays.

New articles introduced in the Labor Law:

Article 138: New provisions related to work shifts

Enterprises can now divide the work schedule into three shifts (morning, afternoon and night) with each shift not exceeding eight hours (the maximum daily work hours). Previously the law only allowed the division of two shifts (morning and afternoon).

The government hopes this will attract some of the more modern industries - such as electronics production and processed foods manufacturing - into Cambodia.

It is important to note that the amendments do not erase the pay rate for employees working regular nightshifts. The rate for regular nightshifts (from 10 pm to 5 am) is 200 per cent of normal wages.

Employers must also continue to provide other additional benefits and health allowances to employees who regularly work night shifts.

Article 300: Labor dispute resolution

Under this article, the jurisdiction of the Labor Arbitration Council has been expanded to also resolve individual labour disputes.

Previously, the Arbitration Council only had jurisdiction over collective labour disputes.

In an individual labour dispute, the disputing parties can file a complaint to the labour inspector to seek conciliation.

If the disputing parties are unable to settle through conciliation by the labour inspector, the concerned party can file a complaint to the Labor Court or with the Arbitration Council.

Through this mechanism, the government aims to settle individual labour disputes more efficiently in addition to promoting more harmonious industrial relations.

Under the old article, any individual dispute could only be referred to the labour inspector of their province.

The formalities related to the new procedure for filing individual labour disputes will be issued in a later Prakas (decree).

Article 343: New powers for the labour inspector

This new provision empowers the labour inspector as a judicial officer to monitor any employment offences as stated in the Labor Law. The legal procedures will be determined in an inter-ministerial Prakas, which is yet to be issued.

Article 162: Cancellation of compensated days off in lieu

Previously, to compensate for any public holiday falling on a Sunday, workers were given a day off in lieu of the following business day. Under Article 162, workers are no longer entitled to this provision.

This may essentially reduce the number of annual public holidays each year, depending on how many occur on a Sunday.

Further, any work performed on a public holiday must be under the supervision of the labour inspector. If the company intends to make employees work on a public holiday, they must apply for permission to the Ministry of Labor and Vocational training (MLVT).

The changes are part of the government’s continuing efforts to improve productivity in Cambodia. In fact, the MLVT has been steadily reducing the number of public holidays since 2018 when 28 public holidays occurred. There were only 22 public holidays in 2020 and 21 days in 2021.

On October 5, 2021, Cambodia’s government issued Royal Kram No. NS/RKM/1021/011 which amends several articles of the Labor Law, Khmer Times summarises the changes and their impact.

The Labor Law was first promulgated in 1997 and has since undergone two amendments, first in 2007 concerning wages for overtime and then in 2018, regarding provisions on seniority indemnity.

The latest changes include allowing enterprises to divide scheduled work hours into three shifts, and the provision that individual labour disputes can now be brought to court if the disputing parties cannot settle with the labour inspector.

The Cambodian government hopes the latest changes can strengthen the competitiveness of the country’s labour market, especially as it intends Cambodia to reach middle-income status by 2030 and high-income status by 2050.

The labour law amendments are reportedly likely to require employers to change the terms and conditions on employment contracts and internal regulations related to work shifts and public holidays.

New articles introduced in the Labor Law:

Article 138: New provisions related to work shifts

Enterprises can now divide the work schedule into three shifts (morning, afternoon and night) with each shift not exceeding eight hours (the maximum daily work hours). Previously the law only allowed the division of two shifts (morning and afternoon).

The government hopes this will attract some of the more modern industries - such as electronics production and processed foods manufacturing - into Cambodia.

It is important to note that the amendments do not erase the pay rate for employees working regular nightshifts. The rate for regular nightshifts (from 10 pm to 5 am) is 200 per cent of normal wages.

Employers must also continue to provide other additional benefits and health allowances to employees who regularly work night shifts.

Article 300: Labor dispute resolution

Under this article, the jurisdiction of the Labor Arbitration Council has been expanded to also resolve individual labour disputes.

Previously, the Arbitration Council only had jurisdiction over collective labour disputes.

In an individual labour dispute, the disputing parties can file a complaint to the labour inspector to seek conciliation.

If the disputing parties are unable to settle through conciliation by the labour inspector, the concerned party can file a complaint to the Labor Court or with the Arbitration Council.

Through this mechanism, the government aims to settle individual labour disputes more efficiently in addition to promoting more harmonious industrial relations.

Under the old article, any individual dispute could only be referred to the labour inspector of their province.

The formalities related to the new procedure for filing individual labour disputes will be issued in a later Prakas (decree).

Article 343: New powers for the labour inspector

This new provision empowers the labour inspector as a judicial officer to monitor any employment offences as stated in the Labor Law. The legal procedures will be determined in an inter-ministerial Prakas, which is yet to be issued.

Article 162: Cancellation of compensated days off in lieu

Previously, to compensate for any public holiday falling on a Sunday, workers were given a day off in lieu of the following business day. Under Article 162, workers are no longer entitled to this provision.

This may essentially reduce the number of annual public holidays each year, depending on how many occur on a Sunday.

Further, any work performed on a public holiday must be under the supervision of the labour inspector. If the company intends to make employees work on a public holiday, they must apply for permission to the Ministry of Labor and Vocational training (MLVT).

The changes are part of the government’s continuing efforts to improve productivity in Cambodia. In fact, the MLVT has been steadily reducing the number of public holidays since 2018 when 28 public holidays occurred. There were only 22 public holidays in 2020 and 21 days in 2021.