The Cambodian Ministry of Labor on Tuesday said it was postponing the biannual indemnity payments to workers in the garment and footwear sector, in order to provide some relief to employers and factory owners affected by the COVID-19 pandemic.
Workers and unionists were quick to reject this move and said they were already facing a loss of salary on account of a large number of factories suspending production and that they needed these indemnity payments to try and sustain their households.
The Labor Ministry statement released on Tuesday announced that all seniority indemnity payments would be pushed back to 2021 to help business owners, who have complained that international brands have reduced their orders or were not accepting completed orders.
Labor Ministry spokesperson Heng Sour did not answer questions about the new move, asking VOA Khmer to refer to the contents of the statement.
It is not clear if the indemnity payments for 2020 will be paid alongside the payments for 2021.
Starting 2019, Cambodia amended its labor regulations to introduce a biannual seniority payment based on the experience and number of years worked. This then did away with severance payments, also called dismissal indemnity, which was applicable only if an employee was unilaterally terminated.
Ken Loo, secretary-general of the Garment Manufacturers Association in Cambodia, said he did not know if employers had made the request, but that it followed Prime Minister Hun Sen’s announcement to delay indemnity payments.
“We have also received an announcement. We are not sure yet,” he said. “We will also ask the ministry for clarification. If you have question, ask the ministry.”
A large number of factories have suspended their operation in Cambodia, affecting the critical garment and footwear sectors, which employ at least 750,000 workers. Ken Loo said 259 factories had suspended their operations due the pandemic-induced economic slowdown.
The government had announced that it would pay garment workers $70 a month if they had been suspended from work, $30 of which would come from the factories.
On May 26, Heng Sour told the Phnom Penh Post that around 33,000 workers would receive these government’s part of the payment through Wing. A Labor Ministry statement from Monday said that 25,588 workers from the tourism and garment sectors would get payments as well, the second such tranche of payments.
Douk Sovann, a unionist for the Cambodian Alliance of Trade Union at Yi Da Manufacturer in Kandal, said workers did not have enough money to cover expenses, and indemnity payments would help alleviate some of these concerns. She said workers get between $60 to $200 through these payments.
“When workers were suspended they were out of work, they couldn't afford to buy food like when they had jobs,” she said.
Oeun Sareth, a worker at Apple Apparel (Cambodia) factory, was worried because the factory had announced they would temporarily suspend operations starting July. She said the $200 she got every six months would be helpful if she faced financial shortfalls in the next few months.
“The ministry should not announce like this,” she said. “They should pity workers who are unemployed. When we see the announcement at the factory, we were immediately discouraged.”
Khun Tharo, a program coordinator at labor rights group Central, said the Ministry of Labor's announcement could benefit some employers, but would further hurt the workers, who without government support would result in a social instability and poverty.
"There can be serious crisis such as social instability, social insecurity, the poverty count would rise,” he said. “And as poverty goes up, people have to think about their livelihoods and what they need to eat food. And then the protests or strikes may occur.”
