Exclusive use of short-term contracts continues to impede progress in Cambodia’s garment sector, with major brands still sourcing from factories violating the statutory two-year limit on temporary employment, labour rights groups have warned.

According to a report released last week by the Worker Rights Consortium (WRC), the widespread practice of employing regular, full-time staff under fixed-duration contracts (FDCs) is partly responsible for the unrest that has marred the sector.

“The Cambodian garment industry’s shift to FDCs as its standard employment arrangement helped set the stage for this crisis,” it says, alluding to a spate of strikes that culminated in deadly clashes in January.

The report urges brands and the Garment Manufacturers Association in Cambodia (GMAC) to heed a WRC-commissioned report from 2011, which called for FDCs to be given only to temporary staff.

According to a 2012-2013 WRC survey of 127 Cambodian factories, which supply to buyers including H&M and Puma, most plant owners employ most or all of their workers on FDCs.

“It is the biggest illegality [in the garment industry] and all brands, factories [and] GMAC are well aware of it,” Dave Welsh, country director of Solidarity Center, said.

FDCs are used against union leaders, women in need of maternity leave and to avoid paying seniority bonuses, he said.

In the report, the WRC said GMAC has gone to “reckless and high-handed” efforts to expand the use of short-term contracts, having “adopted the position that the law allows unlimited serial use of FDCs”.

“[GMAC] has attempted to undermine the country’s leading industrial dispute resolution body [the Arbitration Council],” the report said. By doing so, GMAC “sabotages efforts” to improve labour relations in the garment sector “in order to overturn existing legal jurisprudence on use of FDCs”.

Ken Loo, GMAC secretary-general, said he would support the Arbitration Council’s ruling on FDCs if it was handed down by a court.