Ministry of Labour and Vocational Training issued Instruction No. 045/20 which provides additional measures to support business and employees in the garment sector. Instruction No. 045/20 puts in place the obligations that business must adhere to in order for them to suspend employment contracts. The obligations include helping employees in applying for the government monthly allowance.
- Companies wishing to suspend employment contracts must first submit an application to the MLVT. If approved, the suspended employees can receive monthly allowances from the government.
Suspension of workers' employment contract
The factories garment sectors who want to suspend
employment contracts must first submit an application to the Labour Ministry. Suspension is allowed for the
maximum period for two months but this can be extended
further depending on the circumstances.
Employers need to provide the Cambodian ID card and phone number (or a relative’s) of the employees’ subject to contract suspension to the Labour Ministry. Employers should also take the thumbprint next to the employee details. This will allow the Labour Ministry to verify the eligible candidate for the transfer of monthly allowance subsidies.
It is important that the employer tells the employee of the above requirements because failure to obtain the correct information will result in the employer paying the monthly subsidy allowance (max of US$40).
Lastly, the employer must attach three copies of their employees’ latest payroll before the suspension, marked with the company’s stamp on all pages, in addition to the company’s certificate of incorporation, relevant licenses (such as tourism licenses), tax certificates, bank details, and their National Security Fund (NSSF) number.
The NSSF is a government body responsible for providing social security for workers in the private sector.
Once the application is submitted, the MLVT will conduct a review and a labor inspector may visit the business within two days.
How much are suspended employees entitled to?
The period of suspension must follow the dates as approved by the MLVT. The suspended employee will be entitled to the following monthly subsidies, transferred through Wing Specialized Bank:
US$15 for 7-10 days of employment suspension;
US$30 for 11-20 days of employment suspension; and
US$40 for 21 days to one month of employment suspension.
The funds will be transferred 10 days after the date of suspension. The employee will receive a message on the registered phone number notifying them of the transfer which they must show, as well as their ID, to the nearest Wing Bank branch.
This must be done within the 10-day period otherwise the money will be transferred back to the government.
Suspension of NSSF payments
After the MLVT has approved the suspension of employment application, companies can then suspend their monthly NSSF payments. This is done by writing a formal letter to the NSSF; more information can be found on the MLVT website.
Special requirements for the garment industry
Garment companies who are suspending their employees must also provide allowances in the sum of the following:
US$10 for 7-10 days of employment suspension;
US$20 for 11-20 days of employment suspension; and
US$30 for 21 days to one month of employment suspension.
Businesses and their employees returning to work before the end date of the contract suspension must inform the MLVT at least two working days before the start of operations.
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