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Report from Yale Human Rights Team Finds Cambodian Garment Factories Use Short-Term 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 the spread of short-term labor contracts threatens to roll back the historic progress Cambodia’s garment industry has made in promoting labor rights over the past decade. The report suggests that the country’s reputation as a role model for other developing countries in protecting workers in export-apparel manufacturing may be at risk. The release of the report comes at an opportune time. Following 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 Yale team’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 have adopted the practice of 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 factories categorizing permanent workers as temporary and the potential impact of this practice on the Cambodian garment industry, which, in the last decade, has aggressively competed with other developing countries by promoting its reputation for implementing international labor standards.

According to Professor James Silk, the director of the Lowenstein International Human Rights Clinic at Yale Law School: “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.” 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.

The Yale 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: (1) results in increased worker insecurity; (2) threatens the enforcement of workers’ rights under domestic and international law; (3) presents obstacles to increased labor productivity; (4) jeopardizes Cambodia’s reputation as a country committed to improving conditions for workers; and (5) introduces the threat of a major breakdown of industrial relations, including the potential for massive strikes.”

The report details how FDCs afford workers less protection from exploitation than permanent contracts would afford. It also shows how using FDCs reduces the set of benefits that workers might enjoy if they were properly categorized as permanent employees. The Yale team found evidence that 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 also concludes that the widespread use of FDCs could damage the competitiveness of the Cambodian garment industry. The industry could sustain reputational harm if it is thought by international buyers to be backsliding in the area of workers’ rights, and the widespread use of FDCs raises the risk of strikes in the future. A number of international brands, including Gap, Nike, and Wal-Mart, have already expressed concern over the use of FDCs. The Yale team concluded: “The widespread shift . . . to FDCs has resulted in tremendous worker insecurity, heightened antagonism between unions and factory management, and a threat to peaceful industrial relations.”

The Lowenstein Clinic’s 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 here.

For more information, contact:

Clark Gard (in South Africa), +27-82-361-1869 or clark.gard@gmail.com  
Arthur Plews (in United States), +01 317-752-6580 or arthur.plews@gmail.com  
James Silk (in United States), +01-203-432-1729 or james.silk@yale.edu  

The Allard K. Lowenstein International Human Rights Clinic is a Yale Law School course that gives students practical experience in the range of human rights advocacy activities in which lawyers can engage to promote respect for human rights. The Lowenstein Clinic contributes directly to efforts to protect human rights by providing assistance to appropriate organizations and individual clients. The Clinic undertakes many litigation and research projects. It has provided briefs for the U.S. Supreme Court and many other U.S., foreign and international courts. It has also produced reports and papers on a wide variety of human rights issues.