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​ 

May 10, 2021
Attorneys from Tilleke & Gibbins’ offices in Myanmar, Thailand, and Vietnam have contributed chapters on labor law in these jurisdictions to the Global Employment Law Guide, published by Lex Mundi. The guide provides answers to key employment-related legal questions in 57 jurisdictions around the world, with all entries provided by member firms in the global Lex Mundi legal network. Each chapter contains in-depth information on the jurisdiction’s legal framework governing employment relationships, including coverage of the following topics: Employment categories and contract types Employee rights and protections Employment termination Leave and social benefits Restrictive covenants COVID-19 vaccination mandates and post-pandemic workplace reopening Readers can browse the contributions, generate country-specific reports, and compare attorney-client privilege in multiple jurisdictions. For more information, please visit the Lex Mundi website.
Read More
March 2, 2021
Maintaining positive employee relations is a top concern for virtually all companies. Many companies in Thailand—especially those located in the country’s industrial estates—have labor unions, while others rely on other non-union pathways for attending to the concerns of employees. In all of these cases, the union or collective group of employees also chooses members of the “employee committee” that is charged with fostering good relations and open communications with the employer through regular meetings dedicated to discussion of workplace matters. Companies with a workforce of 50 or more employees need to understand the roles of the employee committee and the specific rights accorded to the committee members, which are different from the rights of the other employees. Besides the obvious benefits that this understanding has for relations with their employees, it is also important if an employer takes disciplinary action against employee committee members, as violation of a committee member’s rights could result in the employer facing criminal penalties. The legal basis for these employee committees is the Labor Relations Act B.E. 2518 (LRA), which stipulates that in any workplace with at least 50 employees, the employees or their labor union of the business establishment is entitled to establish an employee committee. Members are elected (or, in the case of a labor union, appointed) to three-year terms on the committee, with the total number of committee members depending on the size of the workforce, as shown in the table. Membership Requirements Among partially unionized workforces, labor unions are generally given precedence when it comes to control of the committee. If a labor union whose members account for more than 20% of the total employees in a workplace, the union gets to appoint the majority of the employee committee members (e.g., four out of a seven-person committee, five of a
Read More
February 23, 2021
As many are already aware, following the change of government in Myanmar on February 1, 2021, a draft Cyber Security Law was proposed which attracted widespread criticism. However, less attention has been paid to significant amendments to two existing laws, some of which have a similar effect to parts of the draft Cyber Security Law. In other words, while the draft Cyber Security Law has not progressed further and is under public scrutiny, significant elements of it have found their way into law in Myanmar by other routes. Because these amendments are already law, it is very important that individuals and businesses in Myanmar understand their implications. Amendments to the Law Protecting the Privacy and Security of Citizens The Law Protecting the Privacy and Security of Citizens (2017), or the “Privacy Law,” was amended on February 13, 2021, less than two weeks after the military government came into power. These amendments chiefly address the power of the government to conduct searches, seizures, and arrests; to extend detention without judicial oversight; and to carry out broad surveillance and investigation activities that could intrude on individual privacy. The amendments accomplish this by suspending various sections of the Privacy Law for as long as the State Administration Council (the military body now governing Myanmar) is in power. The suspended sections include the following: Section 5: Search, seizure, and arrest without civilian observation The relevant part of Section 5 of the Privacy Law states, “The responsible authorities shall … when acting in accordance with existing law, not enter into a person’s residence or a room used as a residence, or a building, compound or building in a compound, for the purpose of search, seizure, or arrest, unless accompanied by minimum of two witnesses who should comprise Ward or Village Tract Administrators…”. The suspension
Read More