Logo of Phnom Penh Post newspaper Phnom Penh Post - Firms reminded of indemnity duty

Firms reminded of indemnity duty

Content image - Phnom Penh Post
Garment workers in Phnom Penh’s Meanchey district. POSTPIX

Firms reminded of indemnity duty

With claims that some companies are attempting to avoid forking out seniority indemnity payments, the Ministry of Labour and Vocational Training has reminded the owners and bosses of garment and footwear companies of their obligation to implement the new policy.

Indemnity payments for workers in the sector were to be paid for the first time at the end of June.

Minister of Labour and Vocational Training Ith Sam Heng signed a directive on Monday stating that such payments must be provided to all long-term employees whose contracts do not have a date of termination.

The directive said that workers whose contract specified a date of termination would receive the benefits automatically if they were to stay on the job longer than stated in the contract or longer than stipulated in the Labour Law.

Their contract would then automatically become long-term, thereby requiring employers to make such payments.

However, employees on fixed contracts are not entitled to indemnity if they have already received five per cent of payment to terminate their contracts, even if they were to stay on the job longer than stated in their contracts or in the Labour Law.

The directive also stated that indemnity paid before 2019 and from 2019 onwards will be exempt from tax.

Workers who resigned or are dismissed for serious wrongdoing are not entitled to indemnity.

At the beginning of this month, many factories, companies, and enterprises in Cambodia started to provide back pay and indemnity payment for workers in accordance with the ministry’s new policy.

Last year, the ministry changed its indemnity policy for workers in the garment and footwear manufacturing sector by paying workers twice a year instead of a lump sum at the end of their contract.

Indemnity payments before and from 2019 onwards must be made for the first time in June and then in December.

Similarly, companies outside the garment and footwear sector must also pay indemnity to their employees twice a year, the first time in June and December, while indemnity before 2019 is postponed until 2021.

Cambodian Labour Confederation (CLC) president Ath Thorn told The Post on Tuesday that the issue of indemnity payments had largely improved, though some factories still make irregular payments as they seemed not to understand the new policy, while others simply tried to avoid their obligations.

That, he said, has caused a lot of confusion and led to protests.

Nonetheless, Thorn said that most cases had been resolved after negotiations. He called on the Ministry of Labour to continue enforcing the new policy implementation in the interest of the workers.

“Currently, we don’t know how many companies have paid [indemnity] and how many have not. But we know that companies that provide infinite-term contracts have largely complied, while some others refrain from revealing their contracts with employees to avoid responsibility, leading to minor verbal conflicts."

“Regarding this issue, we’ve noticed that some ill-intentioned companies continue to exploit their workers, claiming their contracts are bound by a date of termination,” he said.

Ministry of Labour spokesman Heng Sour and Kaing Monika, the deputy secretary-general of the Garment Manufacturers Association in Cambodia, could not be reached for comment.

MOST VIEWED

  • Purging Sihanoukville’s past with a new masterplan

    Amid illicit activities, haphazard development and abandoned projects, the coastal city of Sihanouk province needs a reset to move forward. A new masterplan might be the answer to shake off its seemingly mucky image to become the Shenzhen of the south Gun toting, shootouts, police

  • Chinese may be first in tourism revival: PM

    Cambodia's tourism industry is gearing up to roll out the red carpet for Chinese travellers after Prime Minister Hun Sen on September 17 indicated that the Kingdom could soon throw open its doors to international holidaymakers vaccinated against Covid-19 – starting with guests from China. Cambodia Chinese

  • Tourism concerns laid bare

    To ensure the success of plans to reopen the tourism market for international visitors, Cambodia must pay utmost attention to two primary determinants – the ongoing paradigm shift in domestic tourism services towards the ‘new normal’, and the factors influencing choices of destinations among foreign holidaymakers.

  • Airline says ready for green light to reopen international tourism

    Sky Angkor Airline Co Ltd on September 21 said it is ready to transport South Korean and Chinese tourists to the Kingdom once the Cambodian government makes good on plans to reopen its borders to vaccinated travellers. The Siem Reap-based airline made the remark during a

  • Covid jab drive for 6-11 age group to begin Sept 17

    Prime Minister Hun Sen has permitted Covid-19 vaccinations for over 1.8 million children aged 6-11 across the country from September 17 in order for them to return to school after a long hiatus. Hun Sen also hinted that vaccinations for the 3-6 age group will follow in

  • No ‘Crown Prince’ exists to buy France football club: ministry

    The Ministry of the Royal Palace has denied media reports that a Cambodian “Crown Prince” had purchased the AS Saint Etienne football club of France’s top-flight LIGUE 1 at the cost of €100 million ($117 million). In a press statement on September 19, the ministry stressed that Cambodia