Cambodia Needs Industrial Relations Strategy to Support IDP

T he Cambodia Industrial Development Policy (IDP) 2015-2025 launched last week represents a commendable vision to embark on a “new growth strategy,” but achieving it will require a frank acknowledgement of challenges, some hard decisions and more innovative and integrated actions, especially in the realm of industrial relations.

Improved and more stable industrial relations among employers, workers and their representatives underlie much of the IDP and its chance for realization in Cambodia. However, many of the IDP’s measures to improve industrial relations stability have already been attempted without yet producing sustainable positive outcomes. The IDP, therefore, appears aspirational at most and non-responsive and uncoordinated at best. Unless new effective approaches are put in place, existing ineffective measures will lead to the same unstable state of industrial relations as we see today—one that has made some progress but continues to be marked by illegal wildcat strikes and allegations of labor standard violations.

In recent years, a strategy for the prevention of labor disputes has not received the attention it deserves. Labor disputes and strikes that could be prevented early on escalate even as they make their way through the dispute resolution system. This leads to increased burdens on the Arbitration Council—the national independent institution for labor dispute resolution—to resolve disputes and get workers and businesses back to work. Collective bargaining agreements are widely considered an effective tool for preventing and managing disputes. Regrettably, there appears to be serious underinvestment by the government and a lack of commitment by employers and unions in a collective bargaining program. To stabilize Cambodian industrial relations, it is important that this problem be rectified through a policy reprioritization. Substantial upgrades should be made to the capacity and resources of concerned government agencies and serious consideration should be given to outcome-driven public-private partnership arrangements.

For more than a decade, industrial relations in Cambodia have been marked by a deep disagreement between employers and trade unions on the allowable duration of employment contracts. Employers and trade unions, especially those operating in the garment and footwear industries, have pursued the interpretation of the policy on employment contracts that favors their respective side, and the divergence has furthered the proliferation of labor strikes and uncertainty in the investment environment. As the employers and trade unions cannot reach an agreement on this legal policy, the government should take action to bring it to uniformity. Clear regulations, which have undergone a process of legitimate stakeholder consultation, should be issued to bring this issue to closure.

Dismissal of or disciplinary measures against trade unionists have been noted as a major factor that triggers labor strikes, according to a soon-to-be released study on strikes by the Arbitration Council Foundation. Introducing a system and processes that concentrate on how to respond expediently and effectively to such cases has the potential to prevent and reduce strike activities. Streamlined procedures for certain categories of cases should be introduced in the dispute resolution framework and other forms of alternative dispute resolution, such as mediation and private processes, should be employed.

Finally, while new social infrastructure programs have the potential to help reduce economic pressures for workers, it is unlikely that they will generate high positive impact toward industrial stability if the misalignment of economic incentives in the current industrial relations structure is not corrected. Highlighted in the study by the Arbitration Council Foundation are the practice of paying wages to workers for the period they go on strike, and unofficial payments to trade unions as a means to maintain industrial peace. These incentives need to be realigned through more effective professional training and counseling, transparency in industrial relations and financial practices, and stronger compliance and effective enforcement measures.

The vision presented in the IDP of a transformed, modernized industrial structure can be achieved. It requires the support of an integrated, innovative industrial relations strategy that addresses the serious challenges to stability and is responsive to the needs of workers, employers and investors who will propel Cambodia forward.

Sok Lor is the managing director of the Sok Xing & Hwang law and policy firm and a former executive director of the Arbitration Council Foundation.

Related Stories

Latest News

The Weekly DispatchA new weekly newsletter from The Cambodia Daily delivering news, analysis and opinion to your inbox. Published every Friday at 11:30am. Sign up today.