The Council of Ministers has approved a draft sub-decree that would provide pensions and disability payments to private sector workers, to be paid for with funds taken from their own salaries and from their employers.
The draft, which was approved Feb 23 and obtained Wednesday, calls for the establishment of a National Security Fund and a new government body to manage it.
The proposed NSF will be funded initially by the government, but will ultimately draw its money from workers’ salaries, employers, fines from businesses that don’t follow fund protocol or violate the Labor Law, and eventually investments made by the fund, the sub-decree states.
The NSF will pay pensions to formally employed workers when they retire and provide financial assistance in the event of injuries. It will also provide death benefits to workers’ families and assist workers on maternity leave.
Ouk Samvithyea, director of the Labor Ministry’s social security department, said the fund should start by the end the year, and that it will be compulsory for businesses and employees to contribute to it.
Prime Minister Hun Sen is expected to sign off on the sub-decree next week, he added.
But several union officials expressed skepticism about the project, saying they did not trust government officials to manage parts of their salaries.
FTU President Chea Mony said workers’ wages are too low to have anything taken out of them. The minimum monthly wage for garment factory workers is currently $50.
“If their wages are cut more, [workers] would be miserable,” Chea Mony said. The money for the fund should come entirely from employers, he said, adding that he feared that the money taken from workers would not be given back to them.
“It’s too early to make allegations, but I do not trust it,” he said.
A nine-person board of directors will run the NSF, according to the sub-decree. This will consist of one director each from the Labor, Finance and Health ministries, one from the Council of Ministers, two chosen by employers, two chosen by employees and one permanent member to chair the board.
Employees will contribute a “small percentage” of their wages to the fund, Ouk Samvithyea said.
The exact amounts that employers and employees will have to contribute will not be determined until representatives for employees, employers and the government discussed it, he added.
Ouk Samvithyea said a team of inspectors and investigators from his department would soon begin visiting restaurants, factories and other businesses to ensure employees register for the fund.
“We will publicize it to make [workers] understand that it would be for their own benefit,” he added.
Chhuon Mom Thul, president of the CPP-affiliated Cambodian Union Federation, said he would welcome the fund because it would bring aid to injured workers or the families of those who died on the job.
Sok Kong, CEO of petroleum giant Sokimex Co, Ltd, said that he had no objection to the fund and that it could work to improve employee performance.
“Employees would have a stable future,” and would therefore work more effectively, he said.
SRP lawmaker Son Chhay said there was a definite need for a social security system in Cambodia, but expressed concern that poor governance would doom it to failure.
“Unless the government creates a more rigorous tax system…and reduces corruption, I doubt the social security [body] can handle even a fraction of its duties,” he said.