KINGDOM OF CAMBODIA Nation King Religion ARBITRAL AWARD. Issued under Article 313 of the Labour Law

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1 KINGDOM OF CAMBODIA Nation King Religion ARBITRATION COUNCIL Case number and name: 63/05-Harta Co. Ltd., Date of Award: 21 November 2005 ARBITRAL AWARD Issued under Article 313 of the Labour Law ARBITRATION PANEL Arbitrator chosen by the employer party: Arbitrator chosen by the worker party: Chair Arbitrator (chosen by the two Arbitrators): You Suonty Tuon Siphann Pen Bunchhea DISPUTING PARTIES Employer party: Name: Harta Pakaging Industrial (Cambodia) Co, Ltd., Address: National road number 4, Kontor village, Ang Snoul district, Kandal province Telephone: (855) Representative: 1. Mr. So Phakdey Administration assistant; 2. Mr. Ly Chang Sang Administration assistant Worker party: Name: Cambodia Federation of Independent Trade Union (CFITU) Address: #19 A; Street 348; Boung Kang Kong 3; Khan Chamkamorn, Phnom Penh Telephone: (855) or (855) Representative: 1. Ms. Tep Kimvannary Vice [President] of CFITU; 2. Ms. Hol Mom Secretary-General of CFITU; 3. Mr. Van Sophea President of Cambodia Independent Trade Union 4. Mr. Chea Roith Official of CFITU.

2 ISSUES IN DISPUTE (in the non-conciliation report) 1. The workers demand that the company reinstate Mr. Van Sophea, President of the local union at Harta Company. JURISDICTION OF THE ARBITRATION COUNCIL The Arbitration Council derives its power to make this Award from Chapter XII, Section 2B of the Labour Law (1997); the Prakas on the Arbitration Council 99/04; the Arbitration Council Procedural Rules which form an Annex to the same Prakas; and the Prakas on the Appointment of Arbitrators 513/05 (Third Term) An attempt was made to conciliate the collective dispute that is the subject of this Award, as required by Chapter XII, Section 2A of the Labour Law. But both parties did not agree to the conciliation and the non-conciliation report no. 001/MoLVT dated 18 October 2005 was submitted to the Secretariat of the Arbitration Council on 24 October HEARING AND SUMMARY OF PROCEDURE BEFORE THE ARBITRATION COUNCIL Place of hearing: The Arbitration Council, Phnom Penh Center Building "A", Sothearos Blvd, Sangkat Tonlebasak, Phnom Penh. Date of hearing: 28 October 2005 at 3:00 p.m. EVIDENCE Witnesses and experts: n/a DOCUMENTS, EXHIBITS AND OTHER EVIDENCE CONSIDERED BY THE ARBITRATION COUNCIL Provided by the employer party: 1. Authorisation letter dated 27 October 2005 from the company to Mr. Ly Chang Sang and Mr. So Phakdey to join in resolving the dispute at the Arbitration Council; 2. Internal Work Rules of Harta company dated 21 October 2005; 3. Commercial business certificate dated 27 April 2004; 4. Certificate of value added tax dated 17 June 2004; 5. Minute on the dismissal of Mr. Van Sophea dated 27 October 2005; 6. Warning letter to Mr. Van Sophea dated 9 July 2005 and dated 1 August 2005; 7. Punch in and punch out card of Mr. Van Sophea; 2

3 8. Minute from the security guard of the factory about the lateness of Mr. Van Sophea.. Provided by the worker party: 1. Letter from the management team of CFITU to the manager of Harta company on the composition of union leaders at Harta company no. 072/2005/CFITU dated 30 August 2005; 2. Letter from the management team of CFITU to the chief of the Office of Labour and Vocational Training in Kandal province no. 076/2005/CFITU dated 5 September 2005 complaining of the manager of Harta company who dismissed Mr. Van Sophea; 3. Minute from Mr. Van Sophea to inform the Office of Labour and Vocational Training in Kandal province dated 28 September 2005; 4. Supporting motion from 45 workers to support the company to reinstate Mr.Van Sophea dated 3 September 2005; 5. Letter from Mr. Van Sophea, President of Cambodia Independent Trade Union sent to President of CFITU dated 3 September 2005 requesting for intervention assistance for reinstatement; 6. Letter to dismiss Mr. Van Sophea dated 1 September 2005; 7. Minute on a collective dispute conciliation dated 30 August 2005; 8. Statute of Cambodia Independent Trade Union at Harta company dated 7 August 2005; 9. Receipt of complaint of Labour Dispute Department of Labour and Vocational Training on registration of Cambodia Independent Trade Union at Harta company received on 26 August 2005; 10. [Letter of] Committee from Cambodia Independent Trade Union at Harta Company sent to H.E Minister of Labour and Vocational Training requesting registration of Cambodia Independent Trade Union s committee at Harta company dated 22 August 2005; 11. Minute on the election for union establishment dated 7 August Provided by the Ministry of Labour and Vocational Training [MoLVT]: 1. Letter requesting collective labour dispute resolution at Harta company no. 1714/MoLVT from H.E Nhep Bunchin, Minister of Labour and Vocational Training dated 8 November 2005; 3

4 2. Non-conciliation report at Harta company no. 001/MoLVT from Mr. Thol Neang, Chief of the Office and Vocational Training in Kandal province dated 21 October 2005; 3. Minute on collective labour dispute conciliation dated 14 October Provided by the Secretariat of the Arbitration Council: 1. Letter No. 340 dated 25 October 2005 inviting the worker party to the hearing; 2. Letter N. 341 dated 25 October 2005 inviting the employer party to the hearing. FACTS Harta Packaging Industries (Cambodia) Ltd. is located at Kontor village; Ang Snoul district, Kandal province. The company employs a total of 220 workers. On 8 September 2005, the office of vocational training in Kandal province received a complaint from Cambodia Federation of Independent Trade Unions (CFITU) and conducted a conciliation on 14 October 2005, but the parties did not reach a settlement. - Having examined the minute of collective labour dispute conciliation; - Having listened to the company and the employee parties as described above and reviewing the minute of the hearing; - Having checked other relevant documents. The Arbitration Council finds that The workers want the employer to reinstate Mr. Van Sophea. Mr. Van Sophea commenced work for Harta company on 5 June 2004 and has a position shipping goods. On 9 July 2005, Van Sophea did not wear [some] shoes during working hours and the company gave him a warning about this. On 12 July 2005, Van Sophea came late for work and the company fined him an amount of 500 riel. On that day Van Sophea was called in for an inquiry and criticized about his act of not wearing the shoes again during working hours, but Van Sophea told the company that he had a sore leg so could not wear shoes. The company found that he did have a sore leg and they then allowed him to work without shoes. On 21 July, Van Sophea came to work late. The company fined Van Sophea an amount of 700 riel, but the company accepted 500 riel from Van Sophea because that was all the money he had on that date. On 27 July, Van Sophea came to work 19 minutes late. The employer did not impose a fine against him at that time. On 28 July 2005, Van Sophea punched in late, about 33 minutes after 7 a.m. 4

5 On 29 July 2005 the company dismissed Mr. Ros Samoul and Mr. Lam Saly as well as five other workers. On 30 July 2005 the company called Van Sophea to transfer his job to the Elastic section, but Van Sophea refused and he went home without notifying the company. On 30 July 2005 some workers conducted a strike demanding that the company reinstate Mr. Ros Samoul and Mr. Lam Saly as well as five other workers. On 1 August 2005 the company warned Van Sophea about his lateness and leaving without permission. At the time the company asked him to take leave for seven days starting from 30 July which leave would be deducted from his annual leave to rethink whether he should resign or continue to work. However Van Sophea took only two and half days beginning from 30 July [2005]. On 3 August 2005 Van Sophea decided to go back to work and agreed with the company s warning so that he could work as usual. On 7 August 2005, 35 workers of Harta company organized an election to establish the new union named Cambodia Independent Trade Union and to elect a panel of union leaders. In the election there were seven candidates and one worker; Van Sophea was elected as President, Mr. Pa Sovannvirith as Vice President and Mr. Ros Samol as Secretary of the union. On 15 August 2005 the workers submitted an application for registering the Cambodia Independent Trade Union at the Ministry of Labour and Vocational Training, but the union was recommended to rewrite its application. On 26 August 2005 the workers registered its union again and received a receipt from the Ministry in charge of Labour. On 30 August 2005, a union representative delivered the registration receipt to the employer representative. On 30 August 2005 there was another strike in front of the company and negotiations to resolve the strike were held at the company from 9 a.m. to about 12 p.m. which Mr. Van Sophea also attended. On 31 August 2005 the workers representative gave the minute of the election to establish the union and the union-elected representatives to the company. The company received it on 1 September On 1 September 2005 the company decided to dismiss Mr. Van Sophea from his work. On 2 September 2005 the company called Mr. Van Sophea and told him about his dismissal and that his employment was terminated from that day. 5

6 REASONS FOR DECISION Mr. Van Sophea commenced work shipping goods for Harta company on 5 June The workers recognized that on 9 July 2005, Mr. Van Sophea did not wear shoes during working hours but Van Sophea argued that he was afraid to step on [the goods being] produced, and that is why he took off his shoes before he went inside [the work place] and the employer had warned him about this problem. The Arbitration Council finds that this warning can be considered a first warning which the company routinely did without taking any specific disciplinary sanction as [stated] in the Internal Work Rules. On 12 July 2005 Mr. Van Sophea was called for another warning about taking off his shoes during working hours; but Mr. Van Sophea told the company that he had a sore leg that prevented him from wearing shoes, and the company found that he did have a sore leg and allowed him to work without wearing shoes. In the hearing the worker party stated that when he showed the employer his sore leg the employer allowed him to not wear shoes. The employer did not raise any objection to this fact. The Arbitration Council finds that as the employer allowed Van Sophea to work without shoes, he did not commit misconduct. Thus, this act should not be considered as a warning concerning misconduct. Both parties agreed in the hearing that on 12 July 2005, Mr. Van Sophea came late for work and the company fined him 500 riel. The Arbitration Council finds that this fine was a sanction to workers who make a mistake. Thus, as the employer took a disciplinary sanction against him already, according to Article 28 of the Labour Law, [the employer] should not fine him again later. Moreover at that time the company did not have Internal Work Rules yet. Therefore it is unclear whether this lateness can be considered [misconduct] which permitted the imposition of a disciplinary sanction. On 21 July 2005, Mr. Van Sophea came to work late and the company argued that it demanded 700 riel from Mr. Van Sophea, But Mr. Van Sophea replied that he did not have the money. On 27 July 2005, Mr. Van Sophea came 19 minutes late and the company did not fine him. On 28 July 2005, Mr. Van Sophea punched in late, 33 minutes after 7 a.m. Both parties agreed that after having known that Mr. Van Sophea punched in 33 minutes late, the company summoned him to the administration office. Mr. Van Sophea told the company that he came on time but he forgot to punch in; the company asked him to continue working. On 30 July 2005, the company called Mr. Van Sophea and told him about transferring [his job] to the elastic section, but Van Sophea refused to work in the new section then he went home without giving any prior notice to the company. Mr. Van Sophea argued that on that day he did not feel well and he went home without notifying the company. The next day, 1 August 2005, he went to ask permission from the company, [then] the company issued a written warning to Mr. Van Sophea and told him to take seven days leave from his annual leave and asked him to think about whether he 6

7 should resign or continue working. Mr. Van Sophea took two and a half days leave and came back to work on 3 August 2005 and told the employer that he agreed to continue working and accepted his mistakes so far because it was enough for him to take two and a half days leave. The Arbitration Council finds that the agreement from the employer not to count 30 July 2005 as annual leave shows that the employer did accept that s/he would not impose any sanction against Mr. Van Sophea concerning this time off. Thus Mr. Van Sophea did not conduct any misconduct following the date that the employer accepted to replace his leave. On 7 August 2005, 35 workers of Harta Co. Ltd., organized an election to establish a new union called Cambodia Independent Trade Union, and elected a panel of candidates and members of a union committee. During this election a group of seven stood as candidates and were elected Union President, Union Vice President, and Union Secretary; according to the minutes of the workers dated 7 August 2005 and the testimony of the workers in the hearing. In the election the seven candidates were named Mr. Ros Samol, Mr. Van Sophea, Mr. Lam Saly, Mr. Por Sovannarith, Mr. Meich Socheth, Mr. Ki Nal and Mr. Phan Rasmey. The result of the election was as follows: Mr. Van Sophea was elected as Union President, Mr. Por Sovannarith was elected as Union Vice President, and Mr. Ros Samol was elected as Union Secretary. After the election, on 15 August 2005, the Union President submitted an application for Cambodia Independent Trade Union to be registered in the union list of the Ministry of Labour and Vocational Training. They were however, required to re-submit this application because the union representative failed to fill out some certain application points. On 26 August 2005, the union representative asked for the reregistration of his union again and received a receipt from the Ministry. On 30 August 2005, the union representative gave the receipt of his new union registration to the employer. The employer recognized at the hearing that s/he did receive receipt of the Cambodia Independent Trade Union registration on 30 August Both parties stated that on that day, there was a strike in front of the company where the workers stood in front of the gate and put up stone blocks preventing entry in and [exit] out. The strike went on from approximately 9 a.m. to 12 p.m. Mr. Van Sophea participated in the negotiations. During the negotiations, the worker party verbally notified the employer that Mr. Van Sophea was elected as the Union President and represented the workers. The worker party prepared a letter to send to the company for notification about the composition of the Cambodia Independent Trade Union on 30 August 2005; but the union representative [actually] gave the minute and results of the election to establish the union and the elected members to the Company on 31 August On 1 September 2005, the company decided to dismiss Mr. Van Sophea because he did not follow management s instructions. On 2 September 2005, the company called Mr. 7

8 Van Sophea to tell him about his dismissal from 2 September 2005 onward. The employer did not notify and/or ask permission from the Labour Inspector regarding the dismissal of Mr. Van Sophea. According to Article 282, Union stewards or former union stewards who relinquish their position for less than 6 months are entitled to benefits provided for in the provisions of Articles 292, 293 and 294 regarding the dismissal, re-assignment or transfer of show stewards. Article 293, paragraph 1 states that The dismissal of shop stewards or candidate for shop stewards can take place only after authorization from the Labour Inspector and the same protective measures apply to former shop stewards three months following the end of their term and to unelected candidates during three months following the proclamation of the results of the ballot According to Prakas 305/01 of the Ministry of Social Affairs, Labour, Vocational Training and Youth Rehabilitation, Article 3, paragraph 3, Any worker belonging to a union who runs for leadership position in that union shall enjoy the same protections from dismissal as a shop steward. This protection begins 45 days prior to the election and ending, if she/he is not elected, 45 days after the election. To this end, the employer must be duly informed of the candidacy by any reliable means Article 4, paragraph 1, states that, Beginning when the application for registration is submitted, all workers who are founding members of a union, as well as those who voluntarily join the union during the application period, shall enjoy the same protections as shop stewards. This protection shall last for a period up to 30 days following the date of registration of the union. Paragraph 2 provides that, Beyond the date specified in the preceding paragraph, this protection shall cover under the conditions specified in Article 282 and 293 of the Labour Law. The Arbitration Council notes that the employer s act to dismiss Mr. Van Sophea, who was elected as President of the Cambodia Independent Trade Union and was protected by the law according to the above Articles and Prakas thereby requiring approval from the Labour Inspector, was in violation of Article 279 of the 1997 Laour Law and Articles 3 and 4 of the Prakas No. 305 of the Ministry of Social Affairs, Labour, Vocational Training and Youth Rehabilitation dated 22 November The Arbitration Council finds that the fact that the employer dismissed Mr. Van Sophea, who was elected as the Cambodian Independent Trade Union President and protected by the law in accordance with the above Articles and clauses, without obtaining permission from the Labour Inspector violated Article 279 of the Labour Law (1997), and Article 3 and 4 of the Prakas 305 of the MoSALVY, dated 22 November Therefore, the Arbitration Council finds that Mr. Van Sophea must be reinstated to the same position maintaining his seniority and other benefits, including benefits for the time in which he was dismissed. 8

9 Based on the above facts, legal principles, and evidence, the Arbitration Council makes its decision as follows: DECISION 1. Order the employer to reinstate Mr. Van Sophea at the same place on the date the award comes into effect. 2. Order the employer to pay full wages and other benefits during Mr. Van Sophea s dismissal so far as he went to work as usual by 30 November Type of Award: Non binding awards This Award will become binding after 8 days of the date of its notification unless one of the parties lodges a written opposition with the Secretariat of the Arbitration Council within this time period. Signatures of Members of the Arbitration Panel: Arbitrator chosen by the employer party: Name: You Suonty Signature:... Arbitrator chosen by the worker party: Name: Tuon Siphann Signature:... Chair of Arbitration Panel: Name: Pen Bunchhea Signature:... 9

10 Annex to arbitral award 63/05-Harta Co., Ltd. Dissent According to Article 37 of the Prakas No. 099/MoSALVY dated 21 April 2004 of the Ministry of Social Affairs, Labour, Vocational Training and Youth Rehabilitation. I, You Suonty, would like to express my dissent against this arbitral award 63/05-Harta Co, Ltd., as follows: The Internal Work Rules of Harta Packageing Industrial (Cambodia) Co. Ltd., were registered at the Ministry of Labour and Vocational Training on 21 October According to Article 24 of the Labour Law, Internal Work Rules must be registered effectively. The visa for registration will issue within 60 days. Before registration on 21 October 2005, Harta Co, Ltd., did not have internal rules to control the workers conduct during working hours. When there are no internal rules the employer imposes sanctions against each worker according to each workers misconduct. An example is the punishment against Mr. Van Sophea. Article 78 of the Labour Law allows the employer to dismiss any worker who commits serious misconduct. Article 83 (B-3) determines that serious misconduct is a serious infraction of disciplinary, safety and health regulations. When there are no Internal Work Rule, whatever employment rules apply are determined by the attitude and practices in the industrial field. The employer always expects that workers must come to work regularly on time. Lateness without a valid reason shall be considered to show a lack of respect for internal rules. Even though the employer did not have any clear internal rules about punishment for a workers lateness in order to force the workers to come to work on time, it does not mean that the employer gives up her/his right of punishment. In July and August 2005 Mr. Van Sophea came late to work many times. The employer imposed all aspects of punishments against him, including monetary fines, transfer of work and forcing him to take his annual leave. These punishments are to warn Mr. Van Sophea to stop violating internal rules in the future. However, even though there were multiple punishments, Mr. Van Sophea continued to come to work late; on the 12 th ; 20 th and 10

11 29 th without reasons. Although the employer imposed sanctions, Mr. Van Sophea continually came to work late, and this fact can be considered as serious misconduct in a garment factory. The ongoing late arrival is a [valid] reason for the employer to dismiss Mr. Van Sophea too. Must the employer seek approval from the Ministry of Labour and Vocational Training to dismiss Mr. Van Sophea because Mr. Van Sophea is a union leader at Harta company? This is the question which needs to be considered based on the facts and the Labour Law. The Cambodian Independent Trade Union at Harta company prepared an application for its union which was registered at the Ministry of Labour and Vocational Training on 26 August 2005 through its registration receipt dated on the same date. Article 268 of the Labour Law determines that if the Ministry in charge of Labour does not reply within two months after receipt of the registration form, the professional organization is considered to be already registered. On 28 October 2005 which was the hearing date, the [Cambodian] Independent Trade Union at Harta factory had not received the registration certificate yet from the Ministry of Labour and Vocational Training. Thus according to Article 268 this union is considered to be registered already. Article 4 of the Prakas 305 provides protection to union leaders. This protection is effective from the date of the union registration form. This protection continues after the union has registered. So, to obtain this protection the union must inform the employer through an acceptable, reliable means about its composition of union leaders. The union must provide a copy of the notice to the Ministry in charge of Labour. The representative of the [Cambodian] Independent Trade Union at Harta factory argued that on 30 August 2005, the first day of the strike at Harta factory, the union delivered the union registration receipt to the security guard of the factory. This receipt recorded only union names and the date which it was prepared by the union, but it failed to record the composition of the union leaders. The union representatives argued also, that on 31 August 2005, the second day of the strike, the union also had delivered a letter about the composition of the union leaders, including Mr. Van Sophea, who were the union leaders, and the minute on the election for union leaders to a security guard of the factory in order to be forwarded to the employer. The employer s representative argued that s/he received only the composition of the union 11

12 leaders on 1 September 2005 which was the date that the employer decided to dismiss Mr. Van Sophea. This matter shows that the union did not use all reliable means in order to notify the employer about its panel of union leaders for the purpose of obtaining union protection according to the law. Moreover, the union did not provide a copy to the Ministry of Labour and Vocational Training about this notice. The union should follow the requirement mentioned in clause 4 of the Prakas 305 to lawfully have its protection as determined by the law. The employer did not need to ask for approval from the Ministry of Labour and Vocational Training to dismiss Mr. Van Sophea because the employer did not receive notice about the panel of the union leaders through any reliable means from the Cambodian Independent Trade Union in order for the employer to know in advance before making a decision to dismiss Mr. Van Sophea. Therefore, I would object to the award of absolute majority. Arbitrator selected by the employer You Suonty 12