Labour disputes occasionally happen between employer and workers/employees. The basis for settlement is the national legal and industrial relations framework available.
In Cambodia this starts from conciliation at the company level and moving up to the labour ministry level and if conciliation fails, the dispute goes to labour arbitration and then finally to the courts.
If arbitration fails to resolve any collective labour disputes, each party can opt for industrial actions – workers/trade unions can opt to go on strike and employers can opt for a lock-out.
In case of company closure, workers/trade unions can exercise their right to ensure that they receive all eligible final payments and severance due under the law.
Covid-19 has caused global demand for garments to slump to an unprecedented level. Since March this year, hundreds of garment factories in Cambodia have partially or fully suspended their operations.
While some have since resumed operations, others have unfortunately been forced to close leaving thousands of workers unemployed.
Unions and labour rights NGOs have expressed concerns over compliance with the local labour law when it comes to workers’ final payments in the event of factory closures.
In the past, trade unions and some NGOs have chosen the tactic to write directly to buyers and overseas politicians to apply pressure and force the factory to pay compensation to the workers.
Often, trade unions wrongfully claim that the factory is trying to avoid paying the required compensations due under the law.
Compliance with the local labour law is what the Garment Manufacturers Association in Cambodia (GMAC) has been promoting from the beginning and Cambodia has been a champion of linking labour rights and trade.
However, compliance with the law shall be on both parties – workers and employers. Workers and trade unions should only demand what they are legally entitled to. In a recent on-going dispute, workers are demanding for payment of “damages” due under Article 91 of the Labour Law.
However, the article clearly states: “The termination of a labour contract without valid reasons, by either party to the contract, entitles the other party to damages.”
Surely the termination in this case due to economic downturn caused by the pandemic is a valid reason and thus no damages are due to be paid to the workers?
This tactic of applying unnecessary external pressure to compel factories to pay compensation that is more than the legally mandated amount is unfair to employers.
While we want to ensure that the rights of workers are properly protected and that they all receive due compensation as the law requires, we also have a duty to ensure that the rights of employers are equally protected. They should not be unduly pressured into making payments in excess of what is required by law.
Ken Loo, Ph D
Garment Manufacturers Association in Cambodia (GMAC)