ILO Says Latest Draft Law on Trade Union an Improvement

The regional director of the International Labor Organization (ILO) said Tuesday that the latest proposed changes to Cambodia’s draft Trade Union Law—which has been blasted by employers and unions alike—marked an improvement over the last version, which the ILO had called a “step backward.”

But Maurizio Bussi, at a meeting on the law in Phnom Penh hosted by the European Chamber of Commerce, resisted inquiries by employers as to his assessment of one of the draft’s most contentious proposals—that as few as 10 people would be allowed to form a union.

Garment factories, Cambodia’s main export earners, blame the proliferation of unions for the bulk of the sector’s rocky labor relations and want the law to keep their numbers down. They say international buyers are already pulling back because of the uncertainty unions are sowing by constantly threatening strikes and warn that export growth could evaporate if they keep multiplying.

A number of the country’s most prominent unions say the law would make it too easy to dissolve them and want it scrapped entirely.

After Tuesday’s meeting, Mr. Bussi said the law was heading in the right direction.

“From what we have seen, there is some improvement. But, you know, one has to see the complete text,” he said.

Without releasing a complete new draft of the law, the Labor Ministry in July announced a number of changes to the version it released in mid-2014. They included cutting the percentage of employees at a given factory needed to give a union most-representative status (MRS)—and the exclusive collective bargaining rights that the status comes with—from 50 plus one to 30.

“I guess this is not bad news,” Mr. Bussi said Tuesday, noting that the 50-percent threshold has been so tough to meet that few factories now have a union with MRS, leaving most employers to deal with several unions to settle industrial disputes.

“If you lower [the MRS threshold] a bit, as it seems that they have, in principle—it’s a mathematical, basically, assumption—you will have more possibility of having one MRS [union] at the enterprise level,” he said.

“And at that point in time it might be easier to respond to what the employers were saying: ‘I want a counterpart, and that counterpart should be my interface in collective bargaining.’”

The Garment Manufacturers Association in Cambodia (GMAC), whose factories employ some 600,000 workers and host the bulk of the country’s trade unions, wants the threshold to stay at 50 percent.

Factory owners have also bridled at the proposal to let as few as 10 people at a factory form a union. Employers say the number would only cause unions to proliferate further, and would rather set the threshold for forming a union at 20 percent of factory employees, where it was in past drafts.

At Tuesday’s meeting, GMAC chairman Van Sou Ieng pressed Mr. Bussi and Jajoon Coue, a specialist on international labor standards and labor law with the ILO, on what they thought the threshold for forming a union ought to be.

Mr. Coue said the ILO had no hard and fast rules on the matter, but added that raising the threshold from 10 people was not the “silver bullet” employers seemed to think it would be for calming the garment sector’s tempestuous labor scene. Neither would keeping the threshold low be the “disaster” they have warned of, he said.

Last week, the Cambodian Federation of Employers and Business Associations published a 10-page paper on why the country needs a union law. But at the event, Mr. Sou Ieng, who also serves as the federation’s president, said he could take it or leave it.

“If the government enforces the existing [labor] law, I think it’s good enough, because the law has procedures,” he said. “I don’t think this trade union law will actually help.”

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