Cameroon, located in Central Africa, has a population of over 28 million people and is often referred to as “Africa in miniature” due to its diverse culture and geography. Despite challenges, such as political instability and security concerns, Cameroon has a fast-growing economy with a growth hovering around 5% in upcoming years according to projections from the World Bank. This growth presents attractive opportunities for multinational companies (MNCs) looking to expand their operations on the African continent.
Strategic location: Cameroon is strategically located in the heart of Africa, bordering Nigeria, Chad, Central African Republic, Gabon, Equatorial Guinea and the Republic of the Congo. The country has prime access to the global economy through major sea ports – including the Port of Douala, Port of Kribi and Port of Garoua – making it an ideal hub for trade and investment across the continent.
Market potential: With a large and youthful population, Cameroon presents a significant market opportunity for businesses looking to tap into a growing middle class. The country’s economy is diverse, with a focus on agriculture, mining, energy and professional services.
Improving business landscape: Cameroon is taking steps to become more business-friendly, with reforms to simplify procedures and reduce bureaucracy. The country has also launched several initiatives to attract foreign direct investment, including tax incentives, special economic zones and the Cameroon Investment Promotion Agency (IPA).
Talent pool and innovation: Cameroon has a relatively well-educated workforce with a strong emphasis on vocational training, making it an attractive destination for businesses looking for cost-effective talent in areas such as engineering, finance and IT. The country is recognized by the Global Innovation Index as being one of the top-performing economies in Africa for technology outputs.
What are the main sources of employment law in Cameroon?
The Labor Code (1992) is the primary legal framework governing employment relationships in Cameroon. In addition to this, other essential regulations include:
- Constitution of the Republic of Cameroon (1972)
- Penal Code (1967)
- Social Security Profile for Cameroon (2017)
- Decree on Deviations of Legal Working Hours
- Collective agreements depending on the principal activity of the company
What do MNCs need to know about employment contracts?
Employment contracts can be established either verbally or in writing in Cameroon. Furthermore, both fixed-term and indefinite-term contracts are permitted. However, if a fixed-term contract lasts longer than three months or requires the employee to move from their usual place of residence, it must be in written form. Additionally, a copy of the contract must be submitted to the local Labor Inspector. While not always required by law, it is recommended to have written contracts for all types of employment contracts as a best practice.
How do probation periods work in Cameroon?
An employee’s probation period cannot be longer than six months, including any renewals. If the employee is a manager, the probation period can be extended up to eight months. The probation period can only be renewed once with the employee’s written consent before the initial trial period ends. If the employee does not agree to the extension in writing, the probation period is considered completed and the employee is hired permanently.
What are the rules for overtime pay?
Any hours worked beyond the regular 40-hour workweek are considered overtime and are compensated as follows:
- During regular work hours:
- The first 8 overtime hours are compensated at 20% over the employee’s hourly wage
- The next 8 hours of overtime are compensated at 30% over the employee’s hourly wage
- Any additional overtime hours (up to 20 hours per week) are compensated at 40% over the employee’s hourly wage
- On Sundays, any overtime hours worked are compensated at 50% over the employee’s hourly wage.
- On public holidays, any overtime hours worked are compensated at 50% over the employee’s hourly wage.
What are the rules regarding termination?
To terminate an indefinite-term contract in Cameroon, either party must provide notice or payment in lieu beforehand. This notice must be written and include the reason for the termination.
Whether the termination is legal or not depends on the situation. If challenged in court, the employer must show that there was a valid reason for the termination, such as gross misconduct or redundancy. On the other hand, fixed-term contracts cannot be terminated before their expiry except for gross misconduct, extenuating circumstances beyond the terminating party’s control (force majeure) or with written consent from both parties.
However, some groups of employees are protected from dismissal, such as pregnant women, worker’s representatives, trade union officials and employees on sick leave.
Is a notice period required?
Employers are authorized to terminate a permanent employment contract either by giving notice or making a payment in lieu of notice. The notice period must be in writing and clearly state the reason for termination. The length of the notice period varies based on the employee’s professional category and length of service, ranging from one to four months.
Upon receiving notice, the employee is entitled to two paid days off per week to search for a new job. This provision ensures that the employee has sufficient time and resources to secure new employment opportunities.
Will an employee be entitled to severance pay upon termination?
When an employer terminates a permanent employment contract, except for reason of gross misconduct, the employee is entitled to severance pay if they have worked for at least two successive years.
The amount of severance pay is based on the length of service and corresponds to a percentage of the monthly gross salary for the last 12 months. The percentages are as follows:
- Less than 5 years of service: 25% of the salary for the last 12 months
- 6 – 10 years of service: 30% of the salary for the last 12 months
- 11 – 15 years of service: 40% of the salary for the last 12 months
- 16 – 20 years of service: 45% of the salary for the last 12 months
- Over 20 years of service: 50% of the salary for the last 12 months
Why are many MNCs now choosing to hire through an Employer of Record (EOR) in Cameroon?
Cameroon is an attractive destination for MNCs looking to expand and hire globally due to its strategic location, advanced workforce and efforts to improve the business environment. However, setting up an entity in Cameroon can be a complex process, requiring companies to navigate bureaucracy and fulfill legal requirements – including special stipulations based on business type, location and industry. Additionally, regulatory compliance, taxation, reporting, payroll processing and other factors require a learning curve for the internal HR team back in the home country.
To overcome these challenges, many companies find that partnering with a qualified EOR, like GoGlobal, is the best way to hire in Cameroon. This arrangement allows companies to build a local team without setting up a legal entity, comply with local laws and regulations, reduce costs, enhance agility in hiring and mitigate employment risks. This model may be a temporary bridge solution or an indefinite solution that allows them to quickly and compliantly tap into the Cameroonian workforce in the long-term.
How does GoGlobal offer MNCs a competitive advantage in Cameroon?
At GoGlobal, we have a team of local experts on the ground in every market we serve, including Cameroon. Our dedicated team members know the “ins and outs” of the country’s regulatory environment and are experts in navigating the labor market’s unique conditions and business culture. This ensures a positive experience for our clients as well as client-workers.
Additionally, our clients can complement GoGlobal’s EOR services with our Recruit & Hire solution, which takes over the end-to-end hiring process, from talent sourcing to onboarding, benefits, and offboarding. This innovative offering can help companies hire and manage headcount for hard-to-fill roles like IT, sales and client services – all in one solution package.
GoGlobal has a significant on-the-ground footprint in Africa, maintaining local offices across 18 countries spanning from North Africa to Sub-Saharan Africa. This extensive on-the-ground footprint empowers GoGlobal to offer exceptional assistance to clients in expanding their operations and building successful teams across Africa.
Our team is here to support you so that your team can focus on your business operations. We take care of the rest.