Facebook Pinterest Search Icon SourcingJournal_horiz Tumbler Twitter Shape photo-camera graph-trend Shape latest-news icon / user

Cambodia Gears up for Garment Sector Wage Talks

Join Theory, Google, H&M, McKinsey, Foot Locker, Lafayette 148, LL Bean, the Retail Prophet and more at Sourcing Journal’s Virtual Sourcing Summit, R/Evolution: Overhauling Fashion’s Outmoded Supply Chain, Oct 14 & 15.

Cambodia’s garment sector is set for a new round of wage talks surrounding pay increases for the coming year, now that an annual rate review is in place.

After ongoing and, at times, deadly strikes garment workers staged late in 2013 and early last year in attempts to secure better pay, the country’s Labor Ministry established a multistep process for reviewing wages. The newly implemented approach was designed to be more inclusive, with the government, factories and unions getting a chance to weigh in, in hopes that the unions behind those strikes would opt for negotiating over protesting.

Last year, workers won a 28 percent pay raise to the current $128 per month, though they had been seeking an increase from the pre-hike $100 to $177. The current rate is nominally higher than the state-defined poverty rate of $120 month.

According to The Cambodia Daily, the country’s Labor Ministry said Friday it would start the new negotiations next month, which will be followed by bilateral negotiations in August and trilateral talks in September. The tripartite Labor Advisory will then meet in October to settle on the Ministry’s recommended wage—either by consensus or secret ballot if the former proves impossible.

Any new wage established will take effect in January 2016.

Workers in Cambodia’s garment sector are prone to protests, so a rate deemed unreasonable could fuel a new round of public fury.

Earlier this month, 2,000 striking garment workers were ordered back to their posts and were said to be damaging the industry’s reputation by their behavior.

The workers left their stations at the M&V International Manufacturing factory, which, according to The Cambodia Daily supplies fast fashion giant H&M, demanding action on 17 different points, including an increase of their monthly transport allowance to $15 and a $1 daily lunch allowance. They went back to work following the Phnom Penh Municipal Court’s orders, but walked out again when negotiations on the points stalled.

In 2014, Cambodia’s Garment Manufacturers Association in Cambodia (GMAC) sought just a 10 percent raise, though the final increase was nearly double that and employers argued they would have difficulty paying the new wages, and that the higher rate would challenge the country’s competitiveness.

There is no telling yet what next year’s wage rate will be, but factories are reportedly still adjusting to the raise that took effect in January.

Related Articles

More from our brands

Access exclusive content Become a Member Today!