Cambodia's New Labour Law Set To Reduce Industrial Action, Boost Business Environment

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Cambodia's New Labour Law Set To Reduce Industrial Action, Boost Business Environment

Cambodia is poised to introduce new trade union legislation, after the National Assembly voted in favour of the move. Once enacted, it will introduce new rules on how trade unions are formed, run and dissolved, as well as establishing clear protocols governing industrial action.

Key Elements of the Upcoming Law

Changes likely considered as improvements by trade unions, but opposed by employers

1. The minimum number for forming a union will be cut from 20-10 workers.

2. A union can be dissolved if more than 50% of its members agree to such dissolution, with the current threshold standing at 25%.

3. A union will be able to acquire "most representative status" and claim associated exclusive bargaining rights if it has the support of more than 30% of the workforce at any given business establishment.

4. The power to cancel a union's registration will rest only with a court of law.

Changes opposed by Trade Unions but likely to be welcomed by business associations

1. Unions will be required to declare their finances and other related matters.

2. A union can be dissolved due to infractions by any one of its leaders

3. For a strike to be deemed legal, it must be agreed to by an absolute majority through a secret ballot.

Those voting should represent more than 50% of the total membership of the union.While trade unions have opposed the draft law on the grounds that it is seen as failing to protect their right to form associations and to strike, industry associations & employers have criticised the proposed law as being too lenient. Despite the reservations expressed by business owners, the impending legislation is expected to have far-reaching consequences for Cambodia's industrial sector, particularly its garment industry which is highly unionised and prone to frequent strikes & factory shutdowns. The new law, once enacted, will make it more difficult for unions to stage frequent strikes & may allay the concern of any investors troubled by the country's recent labour problems.