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June 23, 2020

Cambodia factories seek halt in minimum wage talks

Garment factories in Cambodia are seeking a suspension on the upcoming minimum wage negotiations in the country in order to sustain their businesses.

By Hannah Abdulla

Garment factories in Cambodia are seeking a suspension on the upcoming minimum wage negotiations in the country in order to sustain their businesses.

The schedule of minimum wage negotiations in the textile garment and footwear sectors for 2021 commences from July to September.

In a statement, the Garment Manufacturing Association in Cambodia (GMAC) said Covid-19 has seen many enterprises temporarily suspend operations.

Others have had to close down their operations as buyers have refused to accept products already produced, pay for goods produced and delivered and cancel orders. 

Citing the Law on Minimum Wage, GMAC says negotiations must be based on two elements such as social criteria and economic criteria in which sector profitability is one of the seven main factors.

“In addition…the Law on Minimum Wage states that in the event of act of God or any necessary case, the Minister of the Ministry in charge of labour may issue a Prokas to suspend or change the schedule of discussions of minimum wage. In this case, the minimum wage of the previous year shall remain effective until there is a new minimum wage to replace.”

GMAC adds: “Due to this circumstance the textile, garment and footwear sector is fragile and uncertain in its return to normal operation and the sector’s recovery will take a long time…supporting mechanisms are necessary measures to help stabilise the sector. Therefore, the Garment Manufacturing Association in Cambodia (GMAC) is of the view that the new minimum wage negotiations of 2021 should be postponed. The 2020 minimum wage should remain in effect until the sector returns to its normal position. 

“GMAC strongly hopes the new minimum wage negotiations for 2021 will be temporarily suspended until the situation in the sector is restored. Delaying the negotiations will be a mechanism to support the sector to stay alive as well as maintain employment for workers.”

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