AS promised in the last edition of the "Rule of Law", this week's column
will compare rules regulating labor unions and the right to strike, as defined under
Cambodia's new Labor Law*, with how other countries deal with these two topics.
In determining whether to invest in Cambodia, an investor should be aware of new
provisions in the Labor Law which affect labor unions and the right to strike. At
this point, Cambodia's new Labor Law has been passed by the National Assembly, but
not yet signed by the King. As illustrated below, the provisions in this new Labor
Law relating to labor unions and the right to strike do not seem to deviate from
standard provisions other countries have adopted.
Formation of Unions
Allowing "labor unions" to be formed in Cambodia can be positive for both
employers and employees. Unions and employers do not necessarily have to work against
each other. It is possible to view unions as an opportunity whereby employers and
employees can develop a better working relationship through collective bargaining
and open discussion between the parties. After all, an unhappy employee creates an
unproductive employee. If better relationships can be harnessed by having unions
and employers work out their differences, then both parties will benefit from the
Under Cambodia's Labor Law, unions can be established by all workers, except government
employees if the founding members send the charter of the union and a request to
form a union to the Ministry of Labor. If the Ministry of Labor does not respond
to the request within 2 months after receiving it, the union is considered officially
registered. Thereafter, the charter and a list of individuals managing the unions
shall be sent for notification to the Labor Commission where the union is located,
the Council of Ministers, the Minister of Justice and the Minister of the Interior.
Formation of Unions in Other Countries
In Canada, the decision to certify or decertify unions is within the powers of Canada's
Labor Relations Board. Certification of a union will depend on the Board's finding
whether a majority of the employees in the bargaining unit wish to have a union represent
them. The Board also has broad powers to determine whether certain employees (proposed
by the unions) can participate in the collective bargaining with an employer.
In Thailand, labor unions can be created by employees working in the same profession
or working for the same employer. The Department of Labor Protection and Welfare
(DLPW) has jurisdiction to grant licenses to unions. The grant of a union license
is dependent upon a finding by the DLPW that the union's charter is "not contrary
to law and public order and does not constitute a threat to national security or
Like Cambodia, the Philippines prohibits government employees from joining or creating
unions. The Philippines further prohibits managerial employees, employees of religious
and non-profit organizations to be members of a labor union. To be legitimate, all
labor organizations are required to register at the Department of Labor and Employment.
The Right to Strike
In most countries, the right to strike is only granted after all peaceful means have
been used by the employees and prior notice has been given to the employer or the
relevant governmental body which has jurisdiction over labor issues. Placing procedural
requirements before initiation of a strike protects employers from surprise strikes
and gives both employees and employer an opportunity to resolve their disputes peacefully.
Generally, if a strike is found to violate the procedures specified by the government
and then is declared illegal by the relevant government body, the employer may have
the discretion to terminate the employment of those individuals who do not show up
to work after notice of the strike's illegality has been given.
Before a strike can be initiated by union members or a group of employees, the Cambodian
Labor Law requires the parties to attempt all peaceful means of dispute resolution.
This includes mandatory negotiations between the parties and mandatory conciliation/mediation
by the Ministry of Labor. If mediation fails, the parties are obligated to submit
their disputes to arbitration in accordance with arbitration procedures of the collective
agreement, procedures agreed upon by the parties or procedures contained in the Labor
Under the Labor Law's arbitration procedure, an arbitration panel must be appointed
by the Minister of Labor five days after the conclusion of the mediation process,
otherwise employees have the right to strike. Employees also have the right to strike
if the arbitration panel fails to render its decision after two weeks of its appointment.
In addition, the decision to strike must be adopted by secret ballot, and notice
stating the reasons for the strike must be given to the employer(s) and the Ministry
of Labor at least a seven days prior to the strike. For essential areas which affect
the life, safety and health of part of the population, certain workers are still
required to provide minimum services while they are on strike. In addition, Cambodian
Labor Law prohibits the right to strike to revise a collective bargaining decision
or to revise an accepted arbitration decision.
Right to Strike in Other Countries
In Canada, the right to strike is prohibited if there is a valid collective agreement
between the employers and employees. Like Cambodia, Canada requires employers and
unions to do everything possible to resolve the dispute before initiating any strike,
such as negotiation and conciliation. In contrast to Cambodia, Canada requires an
extra step whereby the unions may strike only after the Minister advises the parties
that he/she will not appoint a conciliation officer or board to resolve the dispute.
Before initiating a strike in the Philippines, a 15 days to 30 days notice must be
filed at the Department of Labor and Employment. However, in the event that the union's
existence is jeopardized or threatened, an immediate strike is allowed and no notice
is required. Unlike Cambodia, Philippines Labor Law explicitly permits the President
of the Philippines and/or the Secretary of Labor and Employment to stop any impending
strike and require the disputing parties to undergo a compulsory arbitration process
if the strike would "adversely affect the national interest" of the Philippines.
Investors should evaluate the issues discussed above, but keep in mind that the right
to form labor unions, collective bargaining, and the right to strike can be positive.
Substantive and procedural regulations by the Cambodian government in these two areas
are crucial to prevent potential chaos in the relationship between employers and
employees in Cambodia.
*This article is based on an English translation of a draft of the Labor Law. The
final version passed by the National Assembly may differ substantively from the draft.
Ratha L. Panh, is an attorney at the Phnom Penh Office of Dirksen, Flipse, Doran