A non-binding justice

Workers employed by Tai Yang Enterprises protest last year. In December 2012, the Arbitration Council ruled that Tai Yang Enterprises, in Kandal province, had no obligation to reinstate or pay severance to 53 workers who lost their jobs after defying company and provincial court orders to end strikes. Photograph: Vireak Mai/Phnom Penh Post

14 May 2013
By Shane Worrell and Sen David
The Phnom Penh Post

When the government passed Cambodia’s Labour Law in 1997, it promised to establish a special court to assist workers and employers in a rapidly expanding industry known for unrest.

More than 15 years on, no such judicial body exists.

The independent dispute resolution body created to fill that vacuum, however, has quietly amassed an enviable track record. While its decisions are non-binding, more than three-quarters of cases dealt with by Cambodia’s Arbitration Council have been resolved, officials told the Post yesterday.

“Our success rate is 76 per cent,” said Ly Sokheng, communications officer for the Arbitration Council Foundation.

The Arbitration Council, which was formed with funding from the International Labour Organization, has heard more than 1,400 cases in its 10 years, about 90 per cent of which have occurred in the garment industry. In 255 cases heard last year, about 100,000 workers were affected by the outcomes.

By filling a gaping hole in the justice system – ironically, by issuing decisions that are not legally binding – many say the Arbitration Council has provided stability to industries and a model to courts.

“It’s one of the most invaluable institutions in the country,” said Dave Welsh, American Center for International Labor Solidarity country manager. “It’s completely free of any level of corruption and government interference, which is highly unusual.”

Sokheng said the Arbitration Council had earned the respect of both sides of the labour divide through impartiality and fairness.

“[The Arbitration Council] is widely respected as a national institution that is independent, transparent [and] that makes fair and equitable decisions according to the law,” he said.

The Arbitration Council has 30 arbitrators who are nominated by the Ministry of Labour, unions and employers associations. It also receives guidance from an international committee of dispute experts.

Vong Sovann, a strike official from the Ministry of Social Affairs, said that in the absence of a labour court, the Arbitration Council played a vital role. “But the time it takes them to find solutions can be a negative,” he said.

This was one reason why some workers chose other avenues, most frequently strikes, said Chea Mony, president of the Free Trade Union.

“While Cambodia does not have a labour court, the Arbitration Council has the main responsibility to resolve labour disputes,” he said. “But in reality, most workers still choose to strike.”

On the other side of the gates, the lag in resolutions and non-binding nature of the council prove equally frustrating to factory owners.

“We need hearings to be processed as soon as possible,” said Ken Loo, Garment Manufacturers Association in Cambodia secretary-general. “But at least the AC makes efforts to issue injunctions for workers to return to work swiftly when strikes have already broken out.”

The funding the Arbitration Council receives from the World Bank under the Demand for Good Governance project will end next year, Sokheng said.

“We are very concerned about the funding situation,” said Sok Lor, executive director of the Arbitration Council Foundation. “For us to ensure our continued ability to provide labour dispute services for employees and trade unions and employers, we need financial assistance from international development agencies and the government as well as from other funding sources for the next four years after March 2014.”

The Arbitration Council, which was funded by the ILO until 2009, receives sporadic donations from other sources. Last year, it revealed it had received a donation of $10,000 from clothing brand Gap, which sources from multiple factories in Cambodia.

ACIL’s Welsh said that ideally, funding for the council should come from diverse sources – whose influence and interests must remain at arm’s length.

Although a labour court appears no closer, Lor did not see the Arbitration Council as having any increased judicial powers in the near future.

“The AC has been trusted by its users mainly because they have a lot of control over the AC’s arbitration process, eg selection of their arbitrators to sit on arbitration panels, control of the timeline for settling their case if the council needs more than 15 days, and so forth. These features would likely be compromised to the disadvantage of users if the AC were to be transformed into a labour court.”

But once established, a labour court could judicially enforce an Arbitration Council finding, he added.