Transformation through Action and Collaboration
Win-Win-Win Outcomes for Cambodia
A Groundbreaking
Collaboration
In a historic move, manufacturers, brands and unions have agreed on the first supply-chain supported collective bargaining agreements
“ACT in Cambodia brings together all key players—workers, employers, and buyers — to address industry challenges with shared responsibility. This ensures sustainable progress for everyone.”
Julia Bakutis
Transforming Cambodia’s Garment
Sector Through Collective Action
Legally Binding
Agreements
Brands, manufacturers, and trade unions have established enforceable agreements to ensure fair wages and improved working conditions.
Collective Bargaining Agreements (CBA)
Structured agreements between factories and trade unions guarantee dispute resolution, wage transparency, and workplace stability.
Industry-Wide
Commitments
Global brands have committed to responsible purchasing practices, ensuring fair labour costing and sustainable wage growth.
Legally Binding
Agreements
Workers gain access to upskilling and reskilling programs, boosting productivity and increasing earning potential.
Collective Bargaining Agreements (CBA)
The partnership fosters transparency, social peace, and compliance with international labour standards.
Industry-Wide
Commitments
This initiative sets a benchmark for fair wages and industrial stability, strengthening Cambodia’s reputation in the global market.
Cambodia’s First
Brand-Supported CBAs
A Groundbreaking
Collaboration
Supply chain complexities and entrenched competitive pressures have made voluntary initiatives and attempts by any single stakeholder to achieve sustained wage improvements ineffective and fundamentally limited.
Employers, unions, and brands in Cambodia are addressing these underlying supply chain dynamics through a groundbreaking new structure that strengthens the industry and simultaneously sets a new standard for growth and sustainability.
This new structure is built on two sets of agreements:
This new structure is built on two sets of agreements:
- Legally binding brand agreements between global brands and IndustriALL Global Union, committing brands to support CBAs in their supply chains.
- A sectoral CBA framework developed by Cambodian social partners, setting wage and benefit standards to be implemented at the factory level.
Brand Commitments:
A Transformative Shift
Headline
- Country Sourcing Volumes that secure Cambodia’s place as a key sourcing destination and incentivise factories to sign CBAs.
- Labour cost integration into purchasing prices, ensuring wage increases are fully reflected in brand cost structures.
- A Skills and Training Fund, enabling factories with CBAs to provide paid training and skill development for workers.
These commitments are monitored through external verification and annual third-party reporting and are enforceable through binding arbitration at the International Court of Arbitration in The Hague.
“This isn’t just about pricing—it’s about ensuring a sustainable supply chain that benefits all stakeholders.”
Senior Vice President, Corporate Responsibility, PVH Corp
“IndustriALL is shifting from voluntary CSR to binding agreements to hold brands accountable. Low wages are a known supply chain risk—binding agreements are key to overcoming this.”
Christina Hajagos-Clausen
Director, Textile and Garment Industry, IndustriALL Global Union
Collective Bargaining Agreements in Cambodia’s Garment, Footwear, and Travel Goods Industry
The social partners in Cambodia, the Employers Association and the Cambodian Trade Unions, negotiated a framework enabling factory-level Collective Bargaining Agreements (CBAs) across the sector. By engaging global brands and creating a standardised CBA template, they ensure the connection to binding brand commitments. Consequently all Factories adopting the template CBA benefit directly from the commitments.
A Foundation for Sound Industrial Relations and Stable Workplaces
The CBAs introduce new industry standards that complement national laws while securing brand support for wage developments that are transparent, accountable, and sustainable. This structure ensures real wage growth for Cambodian garment workers by providing predictable and reliable wage increases negotiated through social dialogue.
Snapshot of CBA Benefits for Workers and Employers
- Guarantees on Freedom of Association
- Wage Increases
- Special Leave
- Maternity Leave
- Skills Development
- Dispute Resolution Mechanism
- Industrial Peace Clause
Win-Win Outcomes for Cambodia’s Garment Industry
By establishing this innovative supply chain framework, the industry in Cambodia is demonstrating leadership and setting a new benchmark for other countries and industries. This programme can achieve win-win outcomes for manufacturers, workers and buyers in Cambodia.
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- The ACT programme represents the first mechanism that directly includes buyers in the wage support structure for Garment workers.
- This innovative approach addresses competitive pressures in the supply chain through social dialogue and legally binding accountability.
- The CBA and Binding Brand Agreements enhance transparency, accountability, and predictability in managing labour costs for manufacturers.
- They also enable manufacturers to uphold the highest standards in compliance with international due diligence regulation, further strengthening the reputation with global buyers.
- The brand-supported CBA can ensure stable and productive supply chains, increase wages and benefits for workers while setting agreed mechanisms for dispute resolution and industrial peace.
“The industry once operated on a zero-sum logic. The ACT approach has fostered a win-win-win.”
Christina Hajagos-Clausen
Director, Textile and Garment Industry, IndustriALL Global Union
ACT Supply Chain Industrial Relations: A First-of-its-Kind Blueprint for Industry-Wide Change
By realising brand-supported collective bargaining agreements, the ACT programme in Cambodia is establishing a supply chain industrial relations framework that will become a blueprint for wage negotiations and wage-setting mechanisms in global supply chains. ACT (Action, Collaboration, Transformation) is an agreement between global brands and retailers and IndustriALL Global Union that combines purchasing practices commitments with an integrated industrial relations approach – making ACT uniquely placed to enable collaboration between manufacturers, brands and trade unions and drive transformation and built a future-proof global garment textiles and footwear supply chains.