Workers from Benoh Apparel and Yu Fa garment factory protested in Phnom Penh on Tuesday over compensation packages handed out by the Ministry of Labour as part of a scheme to reimburse unpaid wages and benefits following the abrupt closure of their factories.
In an unorthodox move, the Labour Ministry set aside $4.6 million to provide severance packages to around 4,000 workers from nine factories whose owners absconded, leaving them unpaid. Officials initiated payments this week for four of the affected firms – Benoh Apparel, Yu Fa, Great Honor and Chung Fai Knitwear – with workers at the firms decrying the packages as well short of what they were owed.
Workers were legally entitled to unpaid salary, annual leave, indemnity for dismissal, compensation for failing to provide a notification period and other damages.
But Orn Soklai, a worker representative for Benoh, said workers had not received annual leave payments or their back pay, resulting in the 200 workers receiving just $40 to $100. The workers protested outside the factory on Tuesday demanding further payment.
“The ministry replied that money that the government has is for 4,000 workers, so it cannot distribute it precisely and they have tried their best to pay the compensation,” Soklai said.
Benoh had ceased operations in November and gave workers $60 for what they said would be a two-month work suspension, but when workers returned, they found the owners had deserted the factory.
Similarly, around 100 workers at Yu Fa Garment Industry protested outside the factory in Phnom Penh’s Choam Chao commune, with worker representative Hor Chheng saying workers had not received compensation for untaken annual leave.
“When we protested, the officials of the Ministry of Labour intervened and promised that they will solve this problem,” she said. “We already told them that we do not want to protest, as long as they agreed to solve for us.”
Ministry spokesman Heng Sour said on Tuesday that the process was ongoing and that it was better than waiting for the government to liquidate the delinquent factories’ assets to cover back pay, the typical way of resolving such disputes. He would not address what would become of the shuttered factories’ remaining assets.
But Ath Thorn, president of the Cambodian Labour Confederation, said the government has not proceeded with the usual process of liquidating assets. He said the $4.6 million disbursement was to accelerate payments to workers and that the subsequent sale of the factories’ assets would be to recoup the money, not cover the discrepancy.
“The $4.6 million is the government’s offer to workers to pay in advance, it doesn’t mean they provided it to the workers for free,” he said.