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Ruling on June Textile spat

Ruling on June Textile spat

June Textile workers strike near the company’s factory in Phnom Penh’s Sen Sok district last month.

The Arbitration Council has issued a ruling in the case of employees from Phnom Penh’s June Textile factory who have been demanding severance payments since the factory burned down in March.

In a decision issued on Friday, the Arbitration Council called on June Textile to compensate workers for a “pre-notice” period ahead of their dismissal of up to three months’ salary. The factory was also instructed to give workers indemnity payments of 15 days’ wages multiplied by the number of years worked at the factory, with a cap at six years, and to pay out remaining annual leave.

For workers on short-term contracts, the Arbitration Council ordered June Textile to pay out remaining annual leave and indemnity equal to 5 percent of what the employees earned during the life of their contracts.

The parties to the dispute now have eight days from the date of the decision to appeal the ruling to the Labour Minister before it goes into effect.

Roughly 1,000 workers from the factory had been demanding payments of US$100 for every year worked at the factory. Factory representatives had offered $20 per year worked – an offer already accepted by more than 2,000 workers.

Those holding out for higher compensation have staged protests in Phnom Penh and had a planned march around the capital blocked by police in Sen Sok district last month.

Rong Chhun, president of the Cambodian Confederation of Unions, called the decision a “success”, estimating that 10-year employees of the factories now stood to receive roughly $600 in compensat-ion, compared with the $200 offered by the company.

Employee representative Chea Vanneath said workers agreed with the decision and had no plans to appeal.

June Textile representatives could not be reached for comment yesterday, although they have previously argued that the fire harmed all parties involved and had left them unable to offer larger
compensation payments. “The factory has suffered damage and can only offer a small amount of money to support the workers,” factory representative Ky Say said last month.

Chhay Rattanak, chairman of the  General Insurance Association of Cambodia, estimated last month that the fire would result in an insurance claim of around $16 million.

Ken Loo, secretary-general of the Garment Manufacturers Association in Cambodia, said yesterday he could not comment until he had read the decision in full.