Garment workers in Cambodia have halted planned strike action after the government drafted out minimum wage terms.

A nationwide strike of garment workers was due to occur over the next three days, led by the local Free Trade Union (FTU).

However, the Cambodian government and five largely pro-government unions have reached an initial agreement for a minimum monthly wage of US$61.

"The Labor Advisory Committee decided on 8 July to increase the minimum wage from US$50 to US$61," Ken Loo, secretary general of Garment Manufacturer's Association in Cambodia (GMAC), which represents 230 factories employing about 200,000 people, told just-style.

"The existing US$6 cost of living allowance will be abolished at the same time. This increase will be effective 1 October 2010 through to 2014."

The final agreement is still being negotiated though, and the FTU's demands for a US$70 minimum wage has not been satisfied. The union is unhappy with the US$5 increase, and the four-year timeframe from 1 October this year.

The agreement was determined without the FTU, leading to claims it does not represent the majority of workers.

The FTU is requesting further negotiation in a bid to get a US$70 minimum wage, as well as focusing more on food, workplace seniority and overtime.

The garment industry is the backbone of the Cambodian economy, being the third-biggest currency earner behind agriculture and tourism.

In the first quarter of 2010, textile and garment exports reached $671m, representing an increase of 7.18% on last year as a result of strong recovery in exports to all its major markets.