Cambodia Pressured on Labor Law Proposals

ITGLWF claims law would be setback for ethical sourcing.

GENEVA — One of the world’s largest apparel unions has criticized proposed amendments to Cambodia’s labor laws aimed at extending the use of temporary work contracts as a setback for ethical sourcing and the promotion of core labor standards.

This story first appeared in the February 24, 2009 issue of WWD.  Subscribe Today.

Neil Kearney, general secretary of the International Textile, Garment and Leather Workers’ Federation, said pressure for the changes has been coming mainly from Hong Kong, Taiwanese and South Korean investors. He said the pressure on the government is being channeled through the Garment Manufacturers Association of Cambodia.

Kearney said the amendment would enable employers to hire workers on indefinite short-term contracts and marks a departure from the current labor code that requires employees who have worked on temporary contracts for two years to be treated by employers as permanent. The union also highlights that contracts of less than one year allow employers to avoid core obligations to workers, including maternity and sick leave.

The global union has taken up the case with the government, urging it not to extend the use of short-term employment and is also lobbying major brands to oppose the move. Major brands that source in Cambodia include Spain’s Inditex Group, Gap Inc., Wal-Mart Stores Inc., Levi Strauss & Co., Nike Inc. and H&M.

“We have written to all the key buyers from Cambodia asking them to insist that suppliers only use workers on full-time contracts,” said Kearney, whose Brussels-based group represents 220 affiliated organizations in 110 countries with a membership of 10 million workers.

In the last decade, he said, there has been a major effort to make Cambodia a center for ethical sourcing, but added this would be difficult to maintain if management is allowed to hire workers for short-term contracts. Kearney is concerned such a move would undermine good corporate codes of conduct that ban companies from using short-term contracts as a means of avoiding legal obligations such as freedom of association and collective bargaining.

Inditex and Gap are part of the ethical trading initiative, he said, adding that some companies have indicated to their suppliers they want them to continue to employ a permanent workforce. However, Kearney has also urged brands that are taking part in Cambodia’s Better Factories Program to publicly state their suppliers will refrain from short-term contract workers.

The program, which is overseen by the International Labor Organization, seeks to improve conditions in Cambodia’s apparel factories by monitoring plants to ensure they adhere to core international standards. Stakeholders in the ILO program includes international buyers, Cambodia’s Garment Manufacturers Association, unions and the government. The project is supported by funds from various sources, including from USAID and the U.S. Department of Labor.

Kearney said with short-term contracts “no worker would have any rights if they want to join a union. The company would just not renew their contract.”

In 2007, Cambodia’s apparel exports were valued at nearly $2.9 billion, representing 70.6 percent of its total merchandise exports, with the U.S. the principal destination with purchases worth $2.5 billion.