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Contracts lead to decreased productivity in garment firms - Report
Aug '11
Short-term employment contracts, used by employers in the Cambodian garment industry, are likely to adversely affect the sector's productivity, according to a latest report.

The research report released by Yale Law School based on a research undertaken in 2009 elucidates that under 'fixed-duration contracts' (FDCs) workers are employed on short-term temporary basis, instead of on a permanent basis, and thus they deprive workers of their legitimate rights to avail benefits like sick leave, maternity benefits and seniority bonuses.

Moreover, the workers are always under a threat that their employers might not renew their employment on expiry of their FDCs. Workers fear that on being discovered that they are members of a worker's union, employers will not rehire them on the expiry of contract, nor they will be able to find employment elsewhere.

The report adds that under FDCs, it becomes quite difficult for workers to form unions and it restrains their collective bargaining capacity.

Thus, the FDCs not only deprive the workers from availing their basic rights, but also act as a hindrance to amicable industrial relations, the report says.

The insecurity amongst workers could, in turn, affect their productivity, the report added.

As a part of recommendations, the report suggested that the Government should fix the time length of FDCs and also the number of times such FDCs can be renewed before these are transformed into permanent contracts or contracts for “undetermined-duration”.

Fibre2fashion News Desk - India

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