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Factories opt for cooperative approach

Arbitration Council Foundation receives acceptance in handling labour disputes

Effective on January 1, 2011, as the result of a Memorandum of Understanding between Garment Manufacturers’ Association of Cambodia and a group of six labour union confederations that represent the Cambodian workers in garment factories – an estimated 90 percent of whom are women – both sides will accept binding decisions from Cambodia’s Arbitration Council.

Executive director Sok Lor of the Arbitration Council Foundation together with Y Samphy, manager of training and communications, keep the 30 part-time Cambodian arbitrators, most of whom are lawyers by training, supplied with financial, legal and administrative support when called upon to resolve disputes mainly between garment factory owners and the unions that represent the people who work in them.

The 30 part-time arbitrators are called on a case-by-case basis to hear disputes and cases are resolved within 15 days unless all agree on an extension.

“Our clients are 85 percent from the garment industry, which is the most unionised industry,” said Sok Lor. Other sectors include hotel, hospitality, construction and energy.

Sok Lor says cases can involve disputes about wages, dismissals, discipline and union activities and the labour rights of women.  “The employer is required by law to provide a day-care center,” Sok Lor said.

“The disputes arise out of the normal course of business, but can be resolved in a speedy, transparent and credible manner. We stand in the middle. We believe by standing in the middle we can give them a forum to address their grievances.”

About 90 percent of cases originate from the Phnom Penh area and Kandal province.

“Ultimately, we want to create a platform that is reliable for both sides because disputes are unavoidable in enterprises that employ so many people,” said Y Samphy

Between 300,000 and 350,000 people are working in the garment factories of Cambodia, Y Samphy estimates.

For each dispute brought to the Arbitration Council, three arbitrators are appointed in a tripartite structure.  One is chosen by the employer, one by the union and the Arbitration Council selects the third, who is the chairman of the three.

“Everything is about the balance of power,” Sok Lor said.

By law the group of three have 15 days to make a decision, known as an arbitral award.  

“If there is a strike, the council would order that the strike be suspended,” Sok Lor said. “”This is called an Interim Return to Work Order, 90 percent of which are respected.”

The Arbitration Council Foundation has funding from the World Bank until June, 2013.  The money goes directly from the World Bank to the Arbitration Council Foundation, with the approval of the Ministry of Economy and Finance.

Dating back to 2003, as part of a Demand for Good Governance program, prior funding came from the United States Department of Labor and the US Agency for International Development, as well as some funding from New Zealand.

The Arbitration Council was established in 2003 according to the provisions of the 1997 labour law. It does not have a government role, but is a state body. It was set up as an NGO to protect its independence.

Since China began its opening-up policy in the late 1970s, the garment industry has grown at a rate of 15.7 percent annually.  As China develops and wages increase, more Chinese garment factories are relocating to Cambodia. While the work is not glamorous, it does provide employment for many Cambodians,  especially women.

The Arbitration Council hears collective labour disputes which are defined as:

“Any dispute that arises between one or more employers and a certain number of their staff over working conditions, the exercise of the recognised rights of professional organisations, the recognition of professional organisations within the enterprise, and issues regarding relations between employers and workers, and this dispute could jeopardise the effective operation of the enterprise or social peace.”  -- Article 302, Labour Law 1997.

The council is empowered to hear rights disputes and interests disputes.  A rights dispute relates to the existing legal rights of parties.  An interests dispute is one which relates to a future benefit and not a legal right.

For each case heard, three arbitrators are selected and they are called the ‘Arbitration Panel.’  The panel represents the Arbitration Council and is responsible for making decisions and orders to settle a dispute between parties.

Each disputing party must choose an arbitrator from their list.

The two arbitrators that were chosen by the parties will then choose a third arbitrator.

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