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Logo of Phnom Penh Post newspaper Phnom Penh Post - Rubber workers compensated after private firm axes 275 jobs

Rubber workers compensated after private firm axes 275 jobs

Workers happy with their severance packages, but with state-owned rubber plantations being privatised, more layoffs might follow

THE government has spent nearly US$500,000 compensating 275 plantation workers who were laid off after state farms were privatised. The layoffs followed the plantation buyout by TTY Corp.

According to Kith Sina, chief accountant at the Memot Rubber  Enterprise, the compensation was paid on Thursday in Phnom Penh.

The government handed over the Memot rubber plantation to its private owners on June 20.

The 9,200-hectare farm employed 1,470 workers, and Memot was one of six state-owned rubber plantation that has been privatised. The others are Boeung Ket, Peam Chaing, Krek, Chamka Leu and Ta Pao. The largest rubber plantation, Chub, is still for sale.

"As a private company, they can't keep the old workers. They imported machinery to replace workers," said Kith Sina.

He said the workers were satisfied with the compensation from the government.

Workers received upwards of US$4,000, depending on their seniority.  Most have worked as security guards since 1979.

Kith Sina said that the company was responding to lower rubber prices and falling demand from China.

Rubber has dropped from US$3,100 per tonne to $1,500.

Pheng Hak, a 67-year-old security guard, said he was happy to leave the company after 28 years of work.

"I think it is a fair solution," he said," he said.

Ly Phalla, director general for the Rubber General Department, said other companies will be cutting staff.

"State and private management have different needs," he said.

"State companies will keep old workers on the payroll, but private companies won't. They need to make profit," he added.

"The government will earn more revenue if this sector succeeds, but we have to let the private sector function," said Ly Phalla.

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