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Labour’s 10 per cent rule

Construction workers erect scaffolding in Phnom Penh in July
Construction workers erect scaffolding in Phnom Penh in July. Hong Menea

Labour’s 10 per cent rule

The Ministry of Labour has issued a prakas urging employers to follow existing regulations in the Labour Law that limit foreign workers to 10 per cent of the total workforce at any one company.

It has warned that failure to stay within this limit – or to obtain special permission to exceed it where skilled foreign workers are necessary because of a lack of Cambodians with matching skills – will see businesses punished.

The warning is just the latest move as part of a government push to regulate foreign labour ahead of ASEAN integration in 2015. In July, the ministries of labour and interior announced their intention to begin enforcing laws requiring foreign workers and expatriates to hold work permits. The government is also carrying out a census of immigrants. Cambodians are particularly wary of illegal Vietnamese immigrants – believed to constitute the majority of illegal foreign workers – and 10 have been deported from Ratanakkiri province since the census began.

According to an August 20 prakas from Labour Minister Ith Sam Heng obtained yesterday, companies must abide by set limits for different categories of foreign employees, which can total 10 per cent. Foreign “office workers” can amount to no more than 3 per cent of the total workforce, “skilled” or “specialised” workers are capped at 6 per cent, and unskilled workers at 1 per cent.

According to the Labour Law, companies violating these regulations without obtaining a waiver are “liable to a fine of sixty-one to ninety days of base daily wage or to imprisonment of six days to one month”.

While these laws have been on the books for years, Labour Ministry spokesman Heng Sour said, many businesses continue to violate them, and the prakas would help “in limiting the number of foreign employees in order to promote our national employees”. “It is also part of our work to more strongly [enforce] foreign workers holding work permits,” he said.

“But we are not cruel. We will make exceptions if investors need foreign employees to improve their work and their production needs, such as experts, technicians, professionals, etc. We ask them to send a letter to the Ministry of Labour explaining why they need these employees, so we can check that there are no Cambodian workers who have the expertise required for the job.”

Sour said that in many industries, Cambodians made up the vast majority of workers, but that supervisors or technicians were usually foreigners. He added that many Chinese-funded hydropower dam sites hired both Chinese labourers and supervisors.

Sour said that, officially, firms had reported about 8,000 foreign workers in total.

According to Sandra D’Amico, vice president of the Cambodian Federation of Employers and Business Associations (CAMFEBA), which represents more than 2,000 businesses, most enterprises are already in compliance with the quotas.

D’Amico added that the recent prakas was “definitely not a surprise” but admitted that CAMFEBA had been receiving more inquiries about labour regulations since the government announced stricter enforcement.

“If there are areas where we think they are not 100 per cent compliant, we support our members to make sure they are fully compliant,” she said.

Matthew Rendall, a senior partner at law firm Sok Siphana & Associates, said that the 10 per cent quota on foreign labour had always been enforced, but that “it’s just a matter [of firms] applying for a waiver”.

He added, however, that it would be very rare for foreign companies in Cambodia to exceed the limits, given the much higher cost of hiring foreign employees and that a company’s “workforce” includes everyone from cleaners to drivers.

But applying the 6 per cent quota to skilled workers in the construction sector, traditionally the domain of Vietnamese skilled labourers, could be an issue, he said.

Sok Kin, vice president of the Building and Wood Workers Trade Union Federation of Cambodia (BWTUC), said that Vietnamese workers outnumbered Cambodian workers in the construction sector.

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