The Ministry of Labour on Tuesday released the names of four factories whose workers will be compensated after their employers absconded owing back pay and severance.
Labour Minister Ith Sam Heng said abandoned workers at Benoh Apparel, Yu Fa Garment Industry, Great Honour Textile Factory and Chung Fai Knitwear will get the compensation next week. The ministry had initially announced that workers at nine such factories would be eligible for compensation, but the status of the other five factories remained unclear on Tuesday.
It was also unclear how much each worker would receive.
Roeum Sao Leap, who worked at Benoh for nine years before owners abandoned the factory in January, said she is owed about $3,000 in unpaid wages and severance.
“If this news is true, we welcome that solution since it’s close to Khmer New Year and we don’t have money to go to our hometown,” Sao Leap said. “It has taken about five months after the employer fled, and I don’t know what compensation we’d get or how the ministry is going to pay us.”
In a message, Ministry of Labour spokesman Heng Sour said it has been government policy to pay out of pocket for garment workers whose employers have absconded.
“We are now under the process of fixing this moral hazard,” Sour said.
One possibility is a severance payment deposit scheme, floated by Sam Heng last month. Under the scheme, businesses in Cambodia would be required to deposit severance payments on a regular basis with the National Social Security Fund (NSSF). If factories do shut down unexpectedly, the NSSF would distribute the severance to workers on behalf of the factory.
William Conklin, the director of labour rights NGO Solidarity Center, said all sides “can work together to come up with something that doesn’t hamper investment but ensures owners don’t run away”.
“We know the industry transitions, there can be downturns and upswings, but what you need is an orderly transition out so that if a company goes bankrupt, workers aren’t left with nothing,” he said. “In many countries this is a standard business practice.”
However, Ken Loo, of the employer representative body Garment Manufacturers Association in Cambodia, said that a severance deposit scheme “requires much more in-depth study and analysis on the impact it would have on all businesses, domestic and foreign, before implementation”.
