The Summary of the Informal Sharing Session with Ministry of Labour on the scope and implications of Prakas 443 on Seniority Payment Indemnity
- 02 October, 2018
- Posted by: EuroCham Cambodia
On the 23rd of September, His Excellency Heng Sour, Chief of Cabinet and Spokesperson of Ministry of Labour and Vocational Training (MoLVT) called for participation from private sectors to attend the informal sharing session to clarify the scopes and implications of Prakas 443 on Seniority Payment Indemnity.
Please find following summaries from CAMFEBA:
Scope & Implication
This Prakas governs all enterprises/establishments and those who are under the Labour Law of Cambodia. Both expat and local employee are also covered.
Some key points captured from the discussion:
- This Prakas shall be implementing from January 1, 2019 onward. The first payment of seniority shall be kicked off in June 2019.
- Pay Back Seniority: refers to the seniority payment which is required to provide to the current employee/worker who have worked at the establishments/enterprises before 2019.
- The pay back seniority shall not exceed than 6 months and equals to only 156 days (26days/month* 6months).
- The Pay Back Seniority shall be calculated based on the net wage (only salary) of each year and the payment shall start from the oldest year of seniority first.
- The Seniority from 2019 onward shall be calculated based wages (Salary and other benefits).
- MoLVT suggested to use 26 days per month as the basic calculation per month and the MoLVT will issue the official instruction further on this (according to the suggestion of HE Heng Sour).
- If the employee/worker resigns, both remaining past seniority and seniority of current year will not be granted anymore.
- The probation period is not considered to include in the seniority period, however, it is subject to how the contract be made with the employee/worker.
- After probation period, the employee/worker who performed the service in their first year employment, from 1 to 6 months, shall be granted the seniority of 7.5 days.
- Tax Obligation on this seniority payment is still in the gray area which the tax department shall clarify later (said by HE Heng Sour).
To understand more about this discussion, please refer to CAMFEBA's website.