Resolution Through Arbitration

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Increase in labour disputes is due to the growth of industries and economic development.  The Arbitration Council is a national institution that is responsible for resolving collective labour disputes – disputes involving groups of workers and their employers. Established in May 2003, the Arbitration Council is relevant in bridging the divide between the labour workforce and industry. They provide free national services to resolve labour disputes through arbitration.

Mr. Sok Lor, Executive Director of the Arbitration Council, sat down with B2B and told us more about the importance of the services the Council offers.

“When the Arbitration Council began in 2003 we received about 100 cases per year. Over that time, labour disputes have increased and still continue to rise. In 2013, we had almost 300 cases, mainly from the garment and footwear sectors where there are more than 600,000 workers.  More workers, more factories and business, means more disputes ,” he said.

Mr. Sok also noted that wage, employment benefits, activities of trade unions and rights of women (nursing hours, maternity leave) could contribute to disputes. If  these are not properly resolved, the workforce is likely to go on strike. This happens when there is no credible middle player to bridge the divide between the two parties, and this is where the Arbitration Council plays a key role for the benefit of both sides.

The council services are for free, but in order for a client to reach the them they must first follow the national process of resolving disputes:

(1) At the enterprise level, both parties should try to negotiate the dispute, if it is not resolved then by procedure it is then forwarded to the Ministry of Labour

(2) The Ministry offers reconciliation of labour disputes. This is the facilitation of the negotiation of both parties within 15 days, and if the case cannot still be resolved, it is then forwarded to the Arbitration Council

(3) The council will register the cases and within 3 days setup a panel of three Arbitrators. And from there, within 15 days, evidence is gathered and both parties have the opportunity to be heard and present their case

(4) After a decision has been made, the results are published and presented in detail. Based on the three Arbitrators,  results are concluded – views from a business perspective, trade unions perspective and a neutral perspective.

The role of the Arbitration is limited, Mr. Sok shared, and can be seen through the strikes that continuously happen. In 2011, there was a downward trend in strike activities Unfortunately, these strikes went up again to from 31 in 2011, to 121 in 2012 and 147 in 2013. This tells us that there is more work to be done, beyond pure arbitration and beyond reliance on one institution. He emphasized the importance of resolving disputes at a base level.

“There should be more actions taken with regards to prevention. It solely depends on how companies manage and prevent the disputes. And what we intend to do is offer two additional services in the coming months,” he added.

The additional services include a specialized training program in negotiation skills. It is aimed at the employer and employees to have better communication skills and to understand the nature of disputes and find better ways to resolve them – as well as increasing productivity by decreasing undermining the workforce. There will also be a private mediation service, which is focused on resolving individual labour disputes. Both services are concentrated on trying to resolve disputes at the start before they grow bigger. Both services will be cost-recovery based.

As Cambodia transitions from a low-income country into lower-middle-income as the GDP is growing beyond $1,000 per capita; it relies on the private sector to play a key role in economic development. To be able to offer an enabling environment for businesses to operate in the country, the demand for rule of law that will help these business and their employees has risen.

“I believe that with the Arbitration Council, it will help attract more foreign investors. This is an environment where Cambodia is a state party to many international companies. So the country is quite committed to international labour standards. When disputes are not resolved they usually end up in strikes, and for factories, strikes will hold up the production. For other institutions such as hotels, this will have an effect on the profitability and reputation of the establishment itself. And we provide these services to help them resolve conflicts and avoid such implications,” Mr. Sok explained.

To know more about the Arbitration Council and its services visit their website over at www.arbitrationcouncil.org

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