The Arbitration Council ruled today that embattled footwear factory Pou Yuen Enterprise Ltd must give long-time workers unlimited duration contracts – despite the fact that workers have received letters informing them that the factory has shut down.

The decision, which came one day ahead of schedule, orders Pou Yuen to give unlimited contracts to workers employed for more than two years at the company, located in Phnom Penh’s Sen Sok district.

The decision was met with mixed feelings by workers, who say they received leaked letters earlier this week informing them that the factory had shut down.

Riem Srey, a 52-year-old garment worker who has worked for the company for seven years, expressed fear that she may receive nothing due to the shutdown.

“I was supposed to get the payment on Tuesday, but I did not go and get it as I considered it incorrect,” Srey said. “But some other workers say I may not get anything if I don’t take it now.”

When asked to confirm that the company is closing, a Pou Yuen representative said he was not authorised to answer questions.

Arbitration Council spokeswoman Ann Vireak said the factory’s decision to shutter its operations was beyond the control of the dispute resolution body, and that workers can file another complaint if they do not receive their severance.

43-year-old worker Pich Sreymao, who has worked at Pou Yuen for more than five years, said she is owed more than $2,000 in severance but that factory managers offered just over $1,000.

“I’ll appeal to the court as I don’t agree with what the factory paid to me,” she said.

Moeun Tola, of the labour rights group Central, said the factory shutting down during the arbitration process was unfair to workers but “quite common”.

"Although they shut down before AC decision, both management of Pou Yuen and brands sourced from the factory are still responsible for the workers,” Tola said.