The Perils of Working without an Employment Contract

In modernized countries the proper legal frameworks are well reinforced by employment contracts. These documents form the basis of a two-way guarantee—the employee will receive their rights and the employer will receive the agreed upon labor. However, many people in Cambodia work without a contract and indeed, for certain roles, this presents both advantages and disadvantages. 

Given the importance of the informal sector—which employs an estimated 90 percent of Cambodians—there is a clear advantage to businesses not being registered and employees not having contracts as it allows people to make a living through means they otherwise would be restricted from doing so.

Since some occupations do not have any proper or specific contract written inside them, some workers or employees can use this advantage to switch between jobs regularly. What are the consequential impacts toward the employees and the business owners when the employees themselves tend to jump between jobs due to the unspecified job contracts? Between specified contract and unspecified contract, in this sense, which one is more suitable for the bosses and the employees? 

One reason that job contracts tend to be avoided in Cambodia is because the business owners do not want to be regulated by the law. Another reason is that employees often do not wish to be chained to a job by a legal document. 

For occupations with proper contract and agreement, the employees of that businesses for firms can be guaranteed, at some level, for the security of their jobs. Apart from this, the business owners may have a better chance of strengthening their investment since their own employees are less likely to quit their jobs so easily. 

With this idea in mind, occupations with proper contracts also present their own challenges. In terms of employees, they cannot simply make changes between jobs as easily as they may want. With that being said, the business owners also need to be aware of the fact that they have to be responsible toward their legal duties such as being able to generate paychecks for the employees on time in accordance with the agreements. Furthermore, the business owners cannot use solely their personal and emotional judgment to fire someone out of his or her work. 

Occupation without proper contract makes it easier for employees to switch from one job to another by avoiding being attached to any tangling agreement with their bosses. Instead for the business owners, they are, as well, not attached to any legal agreement with the employees. Due to this reason, the downside is that any employees with inconsistent job patterns can also be forced to resign without being offered any convincing reason and there is minimal protection from any labor rights violations without a contract.

Even though this kind of employment method may allow the business owners to gain some advantages over their employees, by looking closely, this method also leaves plenty of headaches for business owners. When employees swap between jobs at an irregular interval, production processes and development of the business can be disturbed. 

Often in Cambodian society, there are several annual occasions where business owners may face complications that are related to their labor force. These complications may occur more intensively around the major national and ceremonial celebrations such as the traditional Khmer New Year, the Pchum Ben festival (festival of the dead) and the Water Festival celebration. It is during these times of the year that many of the employees without proper work contract tend to change their occupation across businesses. 

As obvious as it may seems, apart from the annual celebrations that have led many employees to swap jobs, the deeply disruptive COVID-19 pandemic has shook the world with a tremendous impact on the national and global work flows. 

Employees without proper contract can be dismissed pretty easily from their jobs, creating more risk for them in a time of financial instability. Instead, some other properly contracted employees can still receive some forms of legal financial support from the businesses or the firms that they are working for amidst this global chaos. It serves as a way to reduce the effect of financial instability. In this kind of scenario, does a properly contracted job really pay off during a complicated time? 

While low wages, poor working conditions and inadequate management can all bring about circumstances where an employee might want to leave, these issues ought to be addressed whether the employee is working with a contract or not. The responsibility lies with business owners to respect the rights of workers, run their business in accordance with the law and treat their employees with dignity—whether they are contractually obliged to or not. 


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