Change of Employer: Recent Cases on Job Security
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Article 87 of the Labor Law 1997 as amended in 2018 reads: “If a change occurs in the legal status of the employer, such as by succession or inheritance, sale, merger or transference of fund to form a company, all employment contracts in effect on the day of the change remain binding between the new employer and the workers of the enterprise.” This short article reveals key conceptual understandings governing the logic of this law by analyzing two recent labor arbitration cases. Job security seems indeed guaranteed as a matter of law but more needs to be done.
Key words: change of employer, termination, job security.
As in many countries around the world, job security in Cambodia is unstable, especially for garment factory workers many of who are employed on short-term contratcs. 2 When the ownership of the company passes hands, stress increases for everyone. For employees, questions are abundant. Among others, will they still have the job? If so, will the new owner keep things the way it was? Can they ask for some sort of compensation from the old owner? For the employer side, their right to make changes to the way work should be performed is not sacred. Workers will most certainly challenge any changes to the status quo which they perceive as not benefiting them. Whereas the employer rightly wants to make money by introducing new methods in the performance of the work, the employees stand to fight to retain their assured wages and benefits. Thus, here lies the difficulty in striking a good balance between the freedom to undertake and the duty of subordination— two concepts to be taken from the French context since Cambodia’s labor law is essentially a translation of the French labor law— to which I now turn.
