Labor Market

OVERVIEW

About 45% of Cambodia's population of 9.5 million is of working age. Over 60% of the workers are women. Phnom Penh has an estimated population of 691,000, although this figure tends to fluctuate with the migration of persons to and from the countryside, dependent on the agricultural season and conditions.

Cambodia's low labor costs are very attractive to investors. Although wage rates have increased over the past year, they still average out to only $25-30 per month. Foreign companies are currently paying approximately $US100 to $US150 per month for non-qualified workers with minimal English language skills; $US200 to $US350 per month for workers with good English language skills and perhaps a higher education; and up to $US700 per month for bilingual, well educated, well connected workers.

Cambodia's expatriate population is beginning to grow with the return of many of the high government officials. Other Cambodian expatriates are establishing businesses or obtaining positions in the various technical sectors. Many international organizations, such as UNDP under its TOKTEN program, are trying to entice qualified Cambodian expatriates to return to the country and re-enter the Cambodian labor market. Emphasis is also being placed on hiring and training local staff instead of non- Cambodian expatriates. The investment law before the National Assembly further stresses the advancement of Cambodian's into skilled positions. This has proved a boon for those with the appropriate administrative and language skills. Wages in this sector are well above the national rate, ranging from $US80 - $US500 per month.

EMPLOYMENT OF FOREIGN WORKERS

Under the Investment Law of the Kingdom of Cambodia, foreign investor will be permitted to hire foreign nationals who are:

(b) Technical personnel;

(d) Spouses and dependents of the above persons as authorised by the Council for Development of Cambodia and in compliance with the immigration and labor law; provided that:

Their qualifications and expertise are not available in the Kingdom of Cambodia. A resume together with the employee's passport., certificate and/or degree will be required to be submitted to the Investment Council;
Adequate and consistent training is provided -to Cambodian employees;
Promotion of Cambodian staff to senior positions is made over time.

The Cambodian Investment Board will facilitate the granting of visas and work permits to the approved foreign employees. The annual leave entitlement for Cambodian

LABOR FORCE PARTICIPATION

Labor force participation rate is a ratio, expressed in percentage, of persons 10 years old and over who are employed and unemployed to the total population aged 10 years old and over. The labor force participation rate amounted to 46.7 percent in Phnom Penh and 51.6 percent in the other urban stratum. Higher labor force participation rate was noted in the rural stratum relative to Phnom Penh and other urban stratum presumably because of low education enrollment rates and participation in own account agricultural activities at a young age.

Employment rate which is the proportion of employed persons to the economically active population 10 years old and over, was estimated at 89.1 percent in Phnom Penh. Males and females have almost the same employment rate in all strata. However, it should be noted that higher proportion of the females employed were workers without pay in their own family operated farm or business when compared with the employed males.

Unemployment rate was estimated at 10.9 percent for both sexes, 10.8 percent for males, and 11.1 percent for females in Phnom Penh. The rates in other urban areas were approximately 50 percent of the rates in Phnom Penh. However, in the rural stratum unemployment was rather low amounting only to 1.4 per-cent of the economically active ,population. These open unemployment rates do not reflect the extent of underemployment and low income employment, conditions which are known. to be widespread in all the strata.

OCCUPATION

Workers under agricultural and fishery occupations constituted the majority of the total employed persons in the rural stratum, accounting for 84.7 percent of the total employed population in the stratum. In Phnom Penh and other urban strata, service, shop and market sales workers, had the highest proportion of employed persons among the occupation groups. The percentage of legislators, senior officials and managers in Phnom Penh was reported to be as high as 10.7 percent of total employed while this group contributed 5.2 percent in the other urban stratum and 0.6 percent in the rural stratum. In addition, the group of professionals, technicians, and associate professionals comprised 14 percent of total employment in Phnom Penh, 10 percent in other urban stratum, and nearly 2 percent in the rural stratum. Thus, the number of legislators, senior officials, managers, technicians and professionals was reported high in Phnom Penh, constituting 25 percent of the city's total employed persons.

INDUSTRY

Agriculture, hunting and forestry is still the predominant sector contributing 84.9 percent of all employment in the rural stratum. In Phnom Penh, wholesale and retail trade was the dominant sector contributing 34 percent of total employment. Employment under public administration and defense ranks second, contributing 16.9 percent in Phnom Penh and 15.6 percent in other urban stratum but this contribution was rather low at 2.5 percent in the rural stratum. Manufacturing sector is still small contributing 10.2 percent of employment in Phnom Penh, about 5 percent of total employment in other urban stratum, and a mere 2.2 percent in the rural stratum.

THE LABOR CODE

Industrial relations are regulated by a 1992 labor code, which under Article 139 of the Constitution is currently considered to be in effect. The Code appears to be very much like some of the Labor Codes in former French colonies which are very strongly influenced by French labor law. However, the newly adopted Constitution is clear in opting for a free market economy. Consequently, anyone reviewing this currently applicable code should bear in mind that legislative reform in this area is almost certain. To date, the Ministry of Social, Labor, and Veteran Affairs is working on a new draft labor legislation more conducive to a free market economy.

The code contains a general prohibition against forced labor and outlaws employment in satisfaction of a pre-existing debt. It sets minimum wages, allows workers to form professional organisations and allows workers to elect delegates to represent them. It requires all employers of more than 10 employees to maintain an employee handbook which contains all the rules and policies of employment. They should cover the subjects of bonuses, working hours, holidays, vacations, sanitation and safety, duties, and sanctions for employee misconduct. The labor code and the Cambodian constitution do make provision for the creation of labor unions.

The Code requires the eventual establishment of Labor Courts., even though Article 80 .specifies that the try of Labor can fulfill this function in the meanwhile. Specialized Labor Courts are found in civil law countries, such as France and in former French colonies.

LABOR REPRESENTATION

A 11 companies and business establishments which employing at least 10 employees are required to nominate a labor representative. Companies and business establishments subject to this mandatory requirement are companies and business establishments involved in mineral exploitation, handicrafts, agriculture, ports, hotels and other industrial productions. The labor representative and his assistant are elected for a 3 year terms by the employees. The election of the labor representative and his assistant shall take place no later than 6 months after the opening of the enterprise. Based on the number of the employees, the number of labor representatives and their assistants are proportionally set as follows:

For companies and business establishments with at least 51 employees (fifty one), the election of the labor representative and his assistant are divided into two categories, namely:

(ii) Second Category: the election of the labor representative and his assistant representing the management, technicians, engineers, and experts. For companies and business establishments with -branches employing at least 10 employees (ten), the election of the labor representative and his assistant are done at the branches.

The employers are required to provide financial, logistical and mental support to the election. They are also required to maintain records the election of the labor representative and his assistant. For companies and business establishments located in Phnom Penh, two copies of the election records shall be sent, to the Labor Inspection Department of the Ministry of Social Welfare, Labor, and Veteran Affairs at No. 28, Street 184 Sangkat Chey Chumneas, Khann Daun Penh, Phnom Penh. For companies and business establishments located in the provinces municipalities two copies of the election records shall be sent to the provincial or municipal Labor Inspection Department of the Ministry of Social Welfare, Labor, and Veteran Affairs. The records shall be sent no later than 7 days following the election for non- agricultural companies and business establishments, and 15 days for agricultural companies. Employees. eligible to cast vote shall have the following characteristics:

(ii) be 16 years of age at the time of the vote

(iii) never been convicted of any crime.

Candidates eligible to stand for election shall have the following characteristics:

(ii) have the right to vote themselves

(iii) have worked for the company at least one year, unless approved otherwise by the Labor Inspector.

(iv) be 18 years of age at the time of the vote

(v) have no family relationship such as husband, wife, parents, children or grand children of the employer

(vi) be tolerant and respected by their colleagues and competent in their functions.

The employers are required to provide the labor representative appropriate working facilities, logistical support, and place to post announcement and various information. Furthermore, they shall allow each labor representative 12 hours per-week to perform his function as labor representative- and still maintain his regular renumeration. In the event the labor representative can not complete his function over a given period, no bonus shall be allowed by the employer for the overtime except his regular renumeration.

LAW ON IMMIGRATION

For the purpose of administering aliens who come to stay in the territory of the Kingdom of Cambodia, the Law on Immigration is the governing law. The administration of aliens falls within the competence of the Ministry of Interior. The Ministry of Interior is responsible for the registration, the issuance and check and control of resident cards, the outgoing and incoming visas, laissez-passez and passports and other equivalent documents for aliens. For the purposes of the immigration and the admission to stay in Cambodia, aliens shall be divided into 3 types:

(ii) The immigrant aliens.

(iii) The immigrant aliens as private investors.