A US$1 million loan sought by the Ministry of Social Affairs could see more than 1,000 former employees of the defunct Tack Fat garment factory fully compensated for their severance before Khmer New Year.

An industrial dispute has simmered between Tack Fat and its former employees over the company’s legal compensation commitments since it declared bankruptcy last month and laid off its entire workforce. Ke Sokrithiny, a member of the government-lead committee overseeing compensation negotiations, said this week that the Ministry of Social Affairs would attempt to borrow money in order to cover remaining points of compensation that the company has said it is unable to pay.

“I want the ministry to get that money before Khmer New Year [because] if they [workers] wait for a resolution with the factory to be completed, it can take such a long time,” he said.

“Thus the ministry borrows the state money to settle first, and will settle the account with company later.”

He said money could be borrowed from the Ministry of Economy and Finance or state banks but stressed Tack Fat would still be obligated to pay the money back to the government.

Ke Soksithiny offered no promises, saying only that the ministry would do its best to find a loan.

Yong Leap, President of the Free Trade Union of Workers of Cambodia, said her constituency already distrusted the Ministry because of its track record during prior compensation negotiations. Sri Kim You, a lawyer representing Tack Fat, vowed to repay any loan the Ministry could secure.