Workers at a factory that recently shuttered due to bankruptcy protested yesterday and vowed to continue to do so, after they were paid only part of their severance stipulated under the Kingdom’s Labour Law.
Kui Xing factory in Phnom Penh’s Chbar Ampov district closed its doors on January 31. But Free Trade Union representative Ry Sithinet yesterday said management only paid workers for their wages for February and unused annual leave, significantly less than the law demands in this situation.
“According to the Labour Law, the factory has to pay the remainder of the monthly salary, unused leave, penalties for not informing workers, indemnity and damages,” Sithinet said.
Under the Labour Law, when a factory closes without giving prior notice to workers, they must pay workers between seven days and three months wages, depending on the length of employment. They must also pay an indemnity equal to 15 days wages for each year of service at the company.
As for damages, workers on unfixed contracts are due an amount at least equal to the indemnity. Workers on fixed-term contracts are entitled to the total amount of wages they would have received for the remainder of the contract.
However, damages can only be collected if the factory closes with no valid reason, said Moen Tola, head of the labour department at the Community Legal Education Center. Courts have found bankruptcy to be a valid reason for closure in past cases.
About 80 protesters marched to Phnom Penh Municipal Court and then the headquarters for labour rights group Solidarity Center for support, Sithinet said.
Solidarity Center country director Dave Welsh, who was out of the country yesterday, said he believed that in the case of bankruptcy, there is a formula where the company’s assets can be forcibly sold, with workers then paid from the proceeds.
A former Kui Xing representative who identified himself as Phorn yesterday said he believed former employees had already agreed to the payout they received, which negates the Labour Law.
“As far as I know, the workers already thumb-printed contracts to accept their salary for February and unused leave,” Phorn said. “They did not protest when the owner announced the factory’s closure, they just began after it closed.”