Cambodian Garment Factories Use Temporary Employment Contracts to Exploit Workers

Yale Law School’s Allard K. Lowenstein International Human Rights Clinic has released a report on the widespread use of short-term employment contracts in the Cambodian garment industry to deny workers statutory benefits and to restrict their exercise of rights under international and Cambodian law.

The report details how this practice threatens to roll back the historic progress Cambodia’s garment industry has made in promoting labor rights over the past decade, thus undermining the country’s reputation as a role model for other developing countries in protecting workers in export-apparel manufacturing.

Nearly half of all Cambodians working in the manufacturing sector are employed by the garment industry—an industry that accounts for more than 80% of Cambodia’s total exports.

In light of last September’s nationwide strike over wages in the Cambodian garment sector, key players in that industry signed a memorandum of understanding recognizing the need to study the use of short-term employment contracts in Cambodia.

The Lowenstein Clinic’s report, “Tearing Apart at the Seams: How Widespread Use of Fixed-Duration Contracts Threatens Cambodian Workers and the Cambodian Garment Industry,” describes the way Cambodian garment manufacturers are employing their regular, full-time workforce almost exclusively on temporary, fixed-duration contracts (FDCs) that are repeatedly renewed. The report examines both the human rights consequences of this practice and its potential impact on the Cambodian garment industry, which has aggressively exploited its reputation for implementing international labor standards to compete with other developing countries.

According to James Silk, director of the Lowenstein International Human Rights Clinic, “The Cambodian government has been considering amending the labor law to ease restrictions on fixed-duration contracts. The country’s apparel industry is already facing heightened international scrutiny because of the mass firings of workers who participated in a strike last year over low wages. One of the main competitive advantages of the Cambodian garment industry is its reputation for progress on protecting workers’ rights, so it is important to understand the human rights consequences of using FDCs and the impact that permitting their expansion could have on Cambodia’s competitiveness.”

The team interviewed more than 70 stakeholders in Cambodia, including government officials, factory management, labor union officials, local human rights organizations and garment workers. Based on these interviews and an analysis of both international and Cambodian law, the Yale team concluded, “The shift toward FDCs results in increased worker insecurity; threatens the enforcement of workers’ rights under domestic and international law; presents obstacles to increased labor productivity; jeopardizes Cambodia’s reputation as a country committed to improving conditions for workers; and introduces the threat of a major breakdown of industrial relations, including the potential for massive strikes.”

The report details how factories use FDCs to suppress freedom of association and retaliate against union leaders; deny workers benefits to which they are legally entitled, including maternity leave; coerce workers into forced overtime; and deny workers the full salary and bonuses to which Cambodian law entitles them.

The report concludes that in addition to raising the risk of future strikes, the widespread use of FDCs could damage the competitiveness of the Cambodian garment industry once it becomes widely known to international buyers that the country is backsliding on workers’ rights. A number of international brands, including Gap, Nike and Wal-Mart, have already expressed concern over the use of FDCs.

The report urges the Cambodian government not to amend the labor law to ease restrictions on the use of FDCs and recommends that multinational apparel buyers require their suppliers to avoid using FDCs for their regular workforce. The report calls upon the Cambodian government, garment manufacturers, factory workers, labor unions and major multinational corporations to work together toward the common goals of strengthening workers’ rights and protecting the health of the Cambodian garment industry.

The full text of the report is available online as a PDF.

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