Logo of Phnom Penh Post newspaper Phnom Penh Post - Unions and companies alike unhappy with draft changes to law on worker contracts

Unions and companies alike unhappy with draft changes to law on worker contracts

Garment workers wait to listen to Prime Minister Hun Sen speak at an event in September. Facebook
Garment workers wait to listen to Prime Minister Hun Sen speak at an event in September. Facebook

Unions and companies alike unhappy with draft changes to law on worker contracts

Both unionists and private sector representatives are unhappy with draft amendments to Cambodia’s Labour Law, which would overhaul the regulations surrounding worker contracts and guaranteed employee protections.

Negotiations between the Ministry of Labour and representatives from employers and unions have been ongoing since the draft amendments were released on December 14. The amendments closely follow calls from Prime Minister Hun Sen for additional worker protections to be codified in law, part of an ongoing political charm offensive to woo the country’s garment workers ahead of July’s national election.

The current Labour Law stipulates that a fixed duration contract (FDC) cannot exceed two years in length, but allows FDCs to be renewed indefinitely. The proposed changes would keep the FDC maximum length at two years, but after four years of contract renewals – no matter how many renewals occur within that time – the contract would automatically shift to an unlimited duration contract (UDC).

UDCs require employers to pay additional benefits to employees, and – unlike FDCs – provide protection for workers against being fired by requiring cause for any dismissal.

Business representatives raised concerns about the law’s potential effects on employers at a luncheon held by the Cambodian Federation of Employers and Business Associations (CAMFEBA) in Phnom Penh on Friday.

“The government wants workers to have long-term working contracts, and wants employers to give workers protections including worker’s compensation and medical insurance,” said Van Sou Ieng, CAMFEBA’s president. “But we [employers] have to be careful, because this costs us a lot of money, and we want the government to use this money properly.”

Sou Ieng added that the final draft of the law would likely favour workers over employers due to the government’s push for political support ahead of national elections in July.

“In the current political environment, I don’t think any [further Labour Law negotiations] will work in our favour,” he said.

Matthew Rendall, a partner at law firm Sok Siphana & Associates, used the luncheon to raise the issue that the proposed law is geared specifically towards the garment and textile industry, and may negatively affect other industries.

“We need to run the constitutional law test and determine if this law applies only to the garment industry, or if we can make it more flexible for other industries,” he said. “[This law] will make business less attractive [to investors], and we’ve got to let the government know that.”

Ministry of Labour spokesman Heng Sour declined to comment on the ongoing negotiations yesterday.

On the other side of the negotiations, unionists are also concerned about some of the law’s provisions. Yang Sophorn, president of the Cambodian Alliance Trade Union, an independent union with about 10,000 members, said yesterday that she believed the draft amendments would serve to protect employers’ interests.

“We are not satisfied with the new law the government is working on,” she said, citing the provision allowing workers to remain on FDCs for four years, rather than the two-year cap that unions have pushed for.

She also said she was concerned that some of the law’s seemingly employee-friendly stipulations, which include increased seniority payments and guaranteed severance pay at the end of each individual FDC, are small concessions meant to convince the unions to accept the terms of an overall unpalatable law.

Additional reporting by Cheng Sokhorng

MOST VIEWED

  • Hun Sen asks Cambodians to believe in government

    Prime Minister Hun Sen on Monday asked citizens and investors to trust that the government will overcome the challenges brought about by Covid-19 and the loss of the EU’s Everything But Arms (EBA) scheme. Speaking to reporters at the Peace Palace in Phnom Penh,

  • Westerdam passenger ‘never had’ Covid-19

    The US Centres for Disease Control and Prevention (CDC) said the US citizen that allegedly tested positive in Malaysia after travelling on the Westerdam was never infected with Covid-19 in the first place. In an article published in the newspaper USA Today on Friday, CDC

  • ‘Ghost staff’ found, $1.7M returned to state coffers

    The Ministry of Civil Service said more than seven billion riel ($1.7 million) in salaries for civil servants was returned to the state last year after it discovered that the books had been cooked to pay ‘ghost officials’. This is despite claims by the Ministry of

  • Woman wanted for killing own son

    Police in Phnom Penh’s Meanchey district are on the lookout for a woman who allegedly hacked her son to death on Sunday in Stung Meanchey III commune. District police chief Meng Vimeandara identified the son as Chan Sokhom, 32. “The offender can’t escape forever.

  • H5N1 also poses deadly threat, ministry warns

    The Ministry of Health’s Communicable Disease Control (CDC) department has called on citizens to excise caution over H5N1 or bird flu that is spreading in the southern province of Vietnam. In a Facebook post, the department announced that it has made a series

  • Malaysia in turmoil

    Malaysian Prime Minister Dr Mahathir Mohamad has done it again. At the centre of two days of high drama and political manoeuvring, he has, wittingly or not, contributed to shaking Malaysia, and further causing its equities market to fall nearly three per cent. The drama