The Phnom Penh Post has been diligently reporting on the dispute taking place between garment workers and factories. A central issue of the dispute is the use of Fixed Duration Contracts (FDCs) versus Unspecified Duration Contracts (UDCs). The garment industry is hugely important for Cambodia: it represents about 15% of GDP and comprises the vast majority of exports. The workers are almost all women (estimates are about 90%), of which a healthy portion come from rural areas seeking a better life around Phnom Penh. Many of the workers complain that short-term FDCs leave them in a precarious situation, without the long-term security afforded by UDCs.
FDCs and UDCs mainly differ in their requirements and consequences of termination. If an employer wants to get rid of an FDC employee, he can simply decide not to renew her contract, which can last from only a few months to a maximum of two years. While under a UDC, the employer needs a valid reason. FDCs, generally, require the employer to give less notice in the event of actual termination if they decide not to use the non-renewal tactic. The following charts, from our Guide to the Cambodian Labor Law, summarize the relevant legal requirements: