“We require our suppliers to abide to labour law.”
What brands are saying
The most common argument used by brands in response to calls to remediate the wage gap is to underline that they require suppliers to pay their workers’ wages and benefits as required by law, presenting this as a sufficient response. However, most brands admit in their Corporate Social Responsibility (CSR) communication that legally mandated wages in most production countries are not sufficient to meet the human right to a living wage, and do not meet their own expectations on fair remuneration. In the midst of a global crisis, brands are backtracking away from language that refers to living or fair wages and simply referring to weak legal provisions. This already represents a spectacular failure on brands’ commitments to decent wages. But even when considering the legal requirements, it is questionable whether the pandemic related wage cuts in Cambodia meet the requirements under national and international labour law.
One of the biggest causes of wage loss during the pandemic in Cambodia is the reduced or completely withheld wage compensation during full or partial lockdowns. Many national labour laws permit employers to temporarily reduce or suspend operations in a severe crisis, often in combination with governmental support for continued wage payments, or alternative benefit payments, to compensate for the income loss.
In Cambodia, social protection systems as outlined above were not established before the onset of Covid-19. Instead of ensuring employers continued regular wage payments, the government issued a special regulation allowing them to only pay workers US$ 30 per month, with an additional US$ 40 contribution from the government.
Whilst providing this combined payment to workers during the pandemic can be seen as a positive step to cover for the lack of social protection, the shortcomings are striking. The combined US$ 70 is equivalent to a meagre 36% of the legal minimum wage (US$ 192), which already falls far short of securing a decent minimum living standard. Brands stating that their suppliers should abide by the law implicitly refers to compliance with this regulation.
Brands are willingly ignoring the fact that the governments emergency regulation does not just fail to protect workers from hunger and economic misery, but also falls short of meeting the minimum standards of the international labour rights framework, especially ILO conventions C102 on Social Security (Minimum Standards) and C168 on Employment Promotion and Protection against Unemployment. According to the framework, support in periods of unemployment or temporary suspension of work:
- ‘shall be sufficient to maintain the family of the beneficiary in health and decency’ (C102 Art. 67)
- and ‘at a level which provides the minimum essential for basic living expenses’ (C168 Art. 15).
As an additional requirement, both conventions require that payments also meet at least 45% or 50% of the regular or minimum wage. While this requirement becomes relevant for workers with higher wages or in countries with high wage levels, for Cambodia’s poorly paid garment workers the basic living expenditure requirement is pertinent to set the minimum compensation level. Nonetheless it is noteworthy that the US$ 70 compensation would even fall short this second requirement.
In the Cambodian context, the legal minimum wage already fails to cover basic living expenses for a worker and her family. Therefore, in case of a suspension of regular wage payments, as in the current pandemic, any payment rate undercutting the legal minimum wage level fails to meet the standards of the international labour rights framework.
What brands should do
Fashion brands cannot escape from their own responsibility to ensure wages are paid to the workers in their supply chain by referring to the inadequate emergency lockdown compensation scheme by the Cambodian government. Instead, they should respond to the trade unions’ demand by making up the shortfall in wages. Furthermore, brands should agree to negotiate an enforceable agreement to cover wages, severance and basic labour rights as demanded by the #PayYourWorkers/ #RespectLabourRights campaign. In addition, several reports have evidenced that workers are being subjected to increased workloads without fair remuneration, unpaid overtime, severance theft in case of dismissals and the firing and re-hiring of temporary workers in lower seniority and pay grades. All of these indicate labour law violations, and as such brands should increase their due diligence efforts to identify and remediate rights violations.