Raffles Puts Best Face on Breaking Unions

The internationally-renowned Raffles International hotel chain, taking time out from crushing unions at its two Cambodian hotels, presented a more refined image abroad last week when it announced to shareholders and international media that an ugly dispute at its Siem Reap hotel was history.

News that the dispute was resolved reached the Dow Jones Newswire on Friday in Singapore, where the company is based.

A news release issued on Monday quoted Grand Hotel d’Angkor manager Riaz Ma­hmood as saying: “We are delighted to have signed this new col­lective bargaining agreement. It enables us and our employees to move forward and build a successful future.”

But among labor advocates and experts on Cambodia’s labor law, the announced agreement sparked outrage and marked a new level of cynicism in Raffles’ handling of the five-year-long dispute over the payment of service charges to it staff.

Though the labor law forbids a company from negotiating agreements with any party other than its majority union registered with the Ministry of Social Affairs, management at the Grand Hotel d’Angkor in Siem Reap penned an agreement on Friday with handpicked workers hired to replace more than 190 striking employees.

Most of the majority union at Grand Hotel d’Angkor, led by president Pat Sambo, were fired following their weeklong strike in the run-up to the Khmer New Year, and are still negotiating with hotel management to return to their jobs.

When contacted by phone Monday, Mahmood said he was on holiday in Hanoi and would not comment.

Others were more forthright.

“I was shocked by that news report. The hotel has apparently created its own union, and this appears to be a totally illegitimate ploy to avoid talking to the real union,” said Keir Jorgensen of the American Center for International Labor Solidarity, an arm of the US-based AFL-CIO union federation.

Another labor law expert who has been working for several years on Cambodian labor disputes, called the agreement “a flagrant breach of Cambodian labor law” and “extraordinarily provocative and arrogant.” He requested anonymity to protect his job standing.

Locally, public opinion about both Raffles-owned Hotel Le Royal in Phnom Penh and Grand Hotel d’Angkor has suffered since the hotels fired 300 workers who demanded that they be paid part of a mandatory service charge.

The hotels had collected the 10 percent charge for years but did not give it to staff, as is required by Cambodia’s labor law.

As the sacked workers protested, the two hotels, belonging to one of the largest hotel chains in the world, became the target of boycott calls in Phnom Penh’s expatriate community.

Widely circulated e-mails chastised the hotel’s management and called for locals to stop using Le Royal’s swimming pool, gym or bar.

The Washington-based International Republican Institute suspended its relations with the hotel, where it customarily holds press conferences and seminars.

“We felt we had to stand up, because it’s a clear case of right and wrong…. Everyone I’ve talked to in the international community is disappointed, and looking to take their business elsewhere,” said IRI Country Director Jackson Cox.

Management at both hotels declined to take part in any mediated talks this month, and the hotels’ head in Cambodia, Stephan Gnaegi, has not returned numerous calls by reporters or accepted visits to his office in recent weeks.

The Raffles hotels fired their workers last month after the courts in Siem Reap and Phnom Penh said the strikes were illegal and ordered the strikers back to work within 48 hours.

Those orders, made April 8 and April 9, were emergency court injunctions, issued in court in the absence of any union representatives.

Turmoil over the service charge, which first erupted at the Le Royal in April 1999, when between 50 and 75 workers walked off the job, has rocked labor relations at at least five other hotels in Cambodia.

Disputes at three other hotels are in suspended mediation, while the Sunway Hotel in Phnom Penh has joined the Raffles hotels in taking their workers to court for allegedly striking illegally.

Indignation over the withholding of the service charge has spread through the industry and was a major cohesive force when unions at several hotels banded in September 2003 into the Cambodian Tourism and Service Workers Federation under the guidance of Ly Korm.

The young union federation is now hoping that the Ministry of Social Affairs will step in and issue a formal directive on the service charge and force hotels to comply with the law.

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