Garment factories usually pay 50% of wages to their employees when they have to suspend their work due to an economic difficulty. What does the Cambodian labour law say about this?
The Cambodian labour law allows for work suspension due to economic reason (Art. 71(11)). But such a suspension cannot exceed two months and it must be officially approved by the Labour Inspector.
Article 72(1) states…
The suspension of a labor contract affects only the main obligations of the contract, that are, those under which the worker has to work for the employer, and the employer has to pay the worker unless there are provisions to the contrary that require the employer to pay the worker.
Therefore, the employer does not have to pay 50% of the wage to the workers. In fact, they do not have to pay at all.
However, in many garment factories in Cambodia especially those unionized ones there is a collective agreement whereby the employer agrees to pay 50% of the wage during employment contract suspension due to economic difficulty. In this case, the employer has to pay workers in accordance with the agreement.
Now, the tricky part…
The employer often refers to the agreement and thinks they do not have to get an official approval from the Labour Inspector. This is a big mistake! The Arbitration Council would order the employer to to pay 100% (Case 19/13, 160/14, 2016/14, 72/05, 22/05).
The employer must always seek a formal approval from the Labour Inspector even if they have an agreement whereby they agree to pay 50% of wage during work suspension due to economic difficulty.