You are using an outdated browser and your browsing experience will not be optimal. Please update to the latest version of Microsoft Edge, Google Chrome or Mozilla Firefox. Install Microsoft Edge

July 29, 2020

Cambodia: Employers have gained positive insights from COVID-19 pandemic

Subscribe to Updates
Taylor Vinters – International Employment Law Update

The Cambodian Government, like many other countries, tightened its border controls and shut down certain businesses to prevent the spread of COVID-19. Whilst many of these businesses are now reopening and more international travelers are now entering Cambodia, the COVID-19 pandemic is still having a significant impact on Cambodia’s economy, which is heavily dependent on international trade and tourism.

In particular, the garment and footwear and hospitality industries have been hit hardest by the fall in international orders and lack of international tourists; resulting in high numbers of suspended and laid off employees.

There have been challenges for employers during this difficult time; however, it has also provided an opportunity to gain some insight into several matters:

  • Responsiveness of authorities: During the COVID-19 pandemic the Government took a number of decisive actions to support the private sector and employees, including: providing tax exemptions and tax relief for certain industries; providing salary support for employees in the garment, footwear, and tourism sectors; providing flexibility on the duration of employee suspensions; and eliminating certain statutory payments. This has helped some companies remain in business and allowed employees to retain their jobs whilst they have been unable to work.
  • Practical implications for fixed term and permanent employment contracts: Cambodian law allows employment under fixed term contracts or permanent contracts of undetermined duration. Both types of contract can be terminated for force majeure reasons. Short of force majeure, a permanent contact allows an employer significantly greater flexibility to reduce its workforce based on economic conditions, and usually with lower severance costs. Going forward employers may give this more consideration.
  • Use of online services: During the pandemic the Department of Intellectual Property Rights began accepting online submissions for affidavits of use/non-use and renewals. The Ministry of Commerce (MOC), the General Department of Taxation (GDT) and the Ministry of Labour and Vocational Training (MOL) launched a new business registration website whereby companies could register at each of the three ministries at the same time. Previously, while the MOC had an online registration procedure, it was necessary to submit separate physical applications at the GDT and the MOL. In general, there has been an increased reliance by companies on certain online services, such as online banking and payment services; it is likely this will continue to increase, as companies become more self-sufficient and autonomous. It is expected overtime, we will see a greater shift towards more flexible working trends and online-based businesses in order to generally increase efficiency and productivity levels within the workforce.

Comment

The global pandemic has clearly had an impact on the way that businesses will operate going forward, and will revolutionise the way that employees work and whether they need to be at their employer’s premises at all to carry out their duties. There will be certain considerations for employers in respect of their employees’ employment contracts to ensure greater protection for their businesses in the event of force majeure events in the future.

Related Professionals

Practices

Employment

Location

RELATED INSIGHTS​ 

January 16, 2026
Employment law specialists from Tilleke & Gibbins’ office in Vientiane have contributed the Laos chapter to the Guide to Restructuring a Cross-Border Workforce from International Employment Lawyer. This comprehensive global guide, covering 50 jurisdictions worldwide, addresses the complex issue of workplace restructurings, with a particular focus on the needs of multinational companies. The Laos chapter was prepared by associates Naiyane Xaechao and Sayphin Singsouvong. The Q&A-style chapter provides in-depth analysis of key areas related to workplace restructuring, including: Reduction in workforce; Restructuring or reorganization of the business; Changing terms and conditions; and Areas to watch. A PDF of the Laos chapter can be downloaded through the button below. Tilleke & Gibbins also contributed the Cambodia, Myanmar, Thailand, and Vietnam chapters to the Guide to Restructuring a Cross-Border Workforce 2026. To browse the full guide for all 45 jurisdictions, please visit the International Employment Lawyer website.
Read More
January 16, 2026
Employment law specialists from Tilleke & Gibbins’ office in Phnom Penh have contributed the Cambodia chapter to the Guide to Restructuring a Cross-Border Workforce from International Employment Lawyer. This comprehensive global guide, covering 50 jurisdictions worldwide, addresses the complex issue of workplace restructurings, with a particular focus on the needs of multinational companies. The Cambodia chapter was authored by Jay Cohen, partner and director of Tilleke & Gibbins’ Phnom Penh office, and Chanvisal Lok, associate. The Q&A-style chapter provides in-depth analysis of key areas related to workplace restructuring, including: Reduction in workforce; Restructuring or reorganization of the business; Changing terms and conditions; and Areas to watch. A PDF of the Cambodia chapter can be downloaded through the button below. Tilleke & Gibbins also contributed the Laos, Myanmar, Thailand, and Vietnam chapters to the Guide to Restructuring a Cross-Border Workforce 2026. To browse the full guide for all 45 jurisdictions, please visit the International Employment Lawyer website.
Read More
January 14, 2026
Employers operating in Thailand can enforce post-employment noncompete covenants, but success depends on precise drafting and strong evidentiary support. Thai courts will uphold restraints that protect legitimate employer interests and are fair and reasonable in duration, geographic reach, and substantive scope. Overbroad covenants, however, draw judicial skepticism and may fail unless they are drafted in severable, defensible components tied to the employee’s actual role. This article synthesizes recent trends in Thai case practice, explains how Thai courts assess reasonableness in employment restraints, and provides a practical litigation-focused framework for drafting enforceable covenants, preparing evidence, and pursuing relief through the Labor Court. The Legal Framework and Its Practical Implications Thai courts evaluate noncompete covenants under general principles of contract enforceability and public policy, with particular focus on whether a restraint is necessary to protect a legitimate employer interest and proportionate to that objective. In employment matters, this analysis is shaped by the employee-protective tenor of Thai labor law and by the Labor Court’s equitable discretion in determining appropriate remedies. The practical takeaway is that standardized or broadly drafted covenants rarely survive scrutiny. Courts look for a demonstrable nexus between the employee’s actual exposure to confidential information, trade secrets, or customer relationships and the scope of the restraint. Where that nexus is weak or the restraint operates as a blanket prohibition, courts are inclined to decline enforcement or limit relief to a narrowly tailored prohibition. The employer interests most commonly recognized as legitimate in Thai practice include the protection of trade secrets, confidential business information, and goodwill tied to identifiable customer segments or territories. Courts are more likely to enforce restraints where employers can clearly document what information is at risk, why particular customer relationships matter, and how the employee was involved with those assets. Judges also look closely at the
Read More
December 19, 2025
On December 12, 2025, Thailand’s Ministry of Labor published a ministerial regulation prescribing the minimum and maximum wages used as a base for calculating social security contributions. The regulation, which takes effect on January 1, 2026, sets a flat minimum base wage of THB 1,650 per month and a phased increase of the maximum base wage over the following six years, as outlined in the table below. Impact on Social Security Benefits Not only will monthly contributions increase as a result of the adjustment to the maximum wages used as a base for calculating social security contributions, but the maximum benefits available to insured persons will also be enhanced, as shown in the next table. Employer Obligations From January 1, 2026, employers must correctly withhold wages and remit social security contributions for both the employer’s and employees’ portions in compliance with the revised thresholds. Failure to comply may expose employers to penalties under the Social Security Act B.E. 2533 (1990). Employers should ensure that payroll systems are updated as necessary to reflect these changes to the wage ceiling used for social security contribution calculations.
Read More