A garment factory’s alleged efforts to wipe workers’ contract histories clean could be a “test case” for how much international buyers tolerate factories negotiating outside of legal requirements, a labour-rights advocate has said.

After effectively being bought out of their contracts, about 300 employees of USA Fully Field garment in Phnom Penh’s Meanchey district will return to work today on new contracts as the factory “reopens” under the same name.

Dave Welsh, country manager of ACILS/Solidarity Center, says workers have accepted less than they were owed by law.

“You cannot write off your obligations by forcing workers to sign below legal [requirements],” he said.

While the garment industry has experienced multiple cases of workers losing benefits when factories have closed then reopened under a new name, this case was more blatant, he added.

“This could be a test case for the industry,” Welsh said, adding that his office was trying to confirm whether several well-known US retailers bought from the factory.

About 20 workers have refused the payouts, which were $650 for those on undetermined-duration contracts and $100 for those on fixed-duration contracts.

A company spokesman told the Post this week that the factory was not going to close – as workers had feared when they reported equipment being sold off – but a new general manager had been appointed and the company would operate under the same name.

“We … have made new contracts,” he said. “Workers who want to stay here have signed a new contract and will come here on [Friday].”

Garment Manufacturers Association in Cambodia secretary-general Ken Loo said workers had put pressure on management to renegotiate contracts in an attempt to cash in.

Loo said workers had made similar demands at factories that had changed names.

“There shouldn’t be any change,” he said.

Sat Sakmoth, secretary of state at the Ministry of Labour, believed the factory had changed owners after the previous owner fled.

“We will find a resolution for the workers who refused to sign a new contract … but we cannot accuse this [factory] of doing anything illegal because … the new owner has paid the workers.”

Welsh said yesterday that he would meet with ministry officials about all workers being paid what they were owed.

ADDITIONAL REPORTING BY SEAN TEEHAN