Tack Fat Garment Ltd closed its factory in Phnom Penh today, while its lawyer announced the company was bankrupt and unable to fully compensate 1,008 workers who are now out of a job.
Workers showed up to work as usual today at Tack Fat Garment factory in Chak Angre Leu commune of Phnom Penh’s Meanchey district, but found the doors shuttered.
Sry Kim You, an attorney for Tack Fat, convened a meeting with workers and said the company would pay only seniority money, this month’s salary and US$150 in additional compensation to each worker.
“This factory is bankrupt and decided to close today. Over the past year, the factory has had problems and struggled to produce products,” Sry Kim You said.
“The closure without prior notice does not mean the factory will avoid finding a solution for workers. We ask you to understand the company is unable [to pay],” he said.
Workers said, however, they are owed additional compensation under the Kingdom’s Labour Law.
Yang Sophorn, vice president of the Free Trade Union of Cambodia, demanded during the meeting that Tack Fat provide five benefits stipulated in the Labour Law, including severance pay, two month’s pay on top of this month’s salary, seniority bonuses and other compensation.
“The factory owner looked down on workers because he did not give information before the closure. It is an excuse to avoid providing benefits to us,” said Ol Thol, 33, who has worked for Tack Fat for 13 years.
Ol Thol calculated that he is owed a total of $1,600.
Under the 1997 Labour Law, a company that has gone bankrupt is still obligated to pay full compensation.
Chheang Thida, deputy head of the Tack Fat local FTU, said the company had been transporting sewing machines and other equipment from the factory since January, which demonstrated that the factory was “not stabilised”, though management gave no signs of the closure.
“More than 6,000 sewing machines were brought out. The owner intended to cancel the factory without giving compensation and open a new factory,” she said.
She said talks with the company were not fruitful and workers filed a request to the Ministry of Labour for intervention today.
Sum Pharen, deputy bureau chief of the labour dispute department at the Ministry of Labour, said Tack Fat had called him to request that the ministry not intervene and allow them to “negotiate internally with workers”.
“We will give them the chance to negotiate with each other. If there is no solution, we will intervene,” he said.