The new minimum wage will come into effect from January 2016

The new minimum wage will come into effect from January 2016

Swedish fashion retailer H&M has come out in support of the new minimum wage for clothing workers in Cambodia, which has been set at US$140 per month – a 9.4% increase on the current wage of $128 – from the beginning of next year.

“We support higher wages for garments workers and are positive to the recent raise that will be implemented 1 January 2016. While we don’t believe that buyers, such as H&M, should determine wage levels for textile workers, we are positive to the peaceful consultations that have taken place over the past months between the parties on the labour market as well as to wages having been revised annually for the second year running. This is an important step forward towards fair living wages,” the retailer said.

The new wage was agreed following eight days of negotiations by a committee representing employers, workers and the government, but is well below the $168 that unions had been seeking.

The newly agreed figure is understood to have angered some independent unions who have threatened a large demonstration following the country's Pchum Ben religious festival on 15 October.

Cambodia's apparel industry is the country's largest manufacturing sector, but it has been blighted by strikes and wage disputes. The country exported US$5.82bn worth of apparel products last year, and employs more than 600,000 workers, but its wages remain among the lowest in the industry.

Wage negotiations for 2016 began a few months after the minimum wage was lifted by 28% to $128 at the start of this year.

The Labor Ministry has said that when other benefits are calculated, the workers will be making an average of $157 to $168 per month next year.

ILO Cambodia acknowledged the "genuine efforts" by all parties to reach a tripartite consensus, and the "significant progress" made in using data, analysis and tripartite consultative approaches to arrive at a decision. 

It added: "As wages gradually increase, it is important for the industry to improve overall productivity, and for garment buyers to examine their purchasing practices. The ILO Country Office also wishes to note the importance of continued tripartite dialogue and of industrial peace for the benefits of workers and employers in Cambodia."

A new initiative – ACT – set up by the IndustriAll Global Union and involving brands including H&M, Inditex and Primark, got under way in Cambodia recently to discuss moves towards a living wage for garment workers.

Its aim is to try and change the way companies source garments to ensure higher wages can be paid, linking the supply chain responsibilities of buyers to the collective bargaining process between local unions and employers.