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Hundreds of workers protested on Monday after ML Intimate Apparel (Cambodia) Ltd, a garment factory in Poipet, went bankrupt and closed down, leaving nearly 700 workers worried about their future employment as they await final wages and severance pay.
The workers took to the street outside the factory in Banteay Meanchey province after the company suddenly announced its closure without prior notice. However, the dispute was amicably resolved hours later.
According to the meeting minutes viewed by CamboJA News, ML agreed to make wage and benefit payments in two phases to the workers. The first batch of payment consists of wages, set for April 28, while the remaining wages and benefits would be settled in the second phase on May 28.
Employees under fixed-duration contracts (FDC) would receive their final monthly wage, payment for unused annual leave, and a five percent contract completion bonus.
Workers under unspecified-duration contracts (UDC) would be paid their final salary, payment for unused annual leave, seniority indemnity for the first semester, and notice pay.
If the company is unable to pay workers’ wages and benefits on time, it will transfer its assets to the Labor Ministry for liquidation to settle payments to workers.
The company also agreed to continue paying National Social Security Fund (NSSF) contributions for nine pregnant workers until they give birth.
The meeting minutes stated that the workers “accepted the proposed resolution, agreed to maintain public order, and would not file further complaints”.
In 2023, about 400 workers at the ML garment factory in Poipet protested, demanding regular wage payments.
Kim Tonich, staffs’ representative and worker at the factory, said that after the protest, labor ministry representatives and relevant parties met and agreed to the resolution.
However, the sudden closure and current economic conditions have caused workers to worry about sustaining an income and looking after their family, he lamented, noting that the solution was acceptable given that many workers had been employed at the factory for between two and 10 years.
“There have been frequent disputes over wage payments almost every month,” Tonich said. “The economic zone where I used to work in had many factories, but now only one remains. My biggest concern is unemployment.”
He thinks that he and other workers might need to move to Phnom Penh or Kampong Speu province to look for jobs even if it means being separated from their families.
He also wondered if the company will fulfill its payment commitments on time. “I’m not very confident,” he said. “I’m worried that when May 28 comes, they might find another reason not to pay. I urge the ministry to make sure all workers are paid.”
Worker Vorn Sokny, 32, shared similar concerns. Affected by the sudden job loss as it has seriously impacted her family’s finances, she plans to seek work in Kampong Speu province.
While she acknowledged that the company suspended operations due to financial difficulties, workers were nevertheless left with no choice but to accept it.
“Some points are acceptable, but others are not,” she said. “It’s difficult to accept such a sudden closure. We have to wait and see what actually happens, as the ministry said compensation will be paid next month,” she mentioned, hoping that the ministry will monitor the situation to make sure that all payments are made.
Labor Ministry spokesperson Sun Mesa confirmed that both parties reached an agreement on eight points, including splitting the payment for wage and benefits–April 28 and May 28.
Ngoun Sivutha, the factory’s administrative director, confirmed with CamboJA News that they officially closed on April 27 due to financial problems, geopolitical issues, border closures, and competition in the sector.
“We will resolve compensation in accordance with the law, and the factory will not reopen,” he said. “We request 30 days to pay workers’ wages.”
Am Sam Ath, operations director of the rights group Licadho, said many Cambodians rely on jobs in the garment sector but continued factory closures could severely impact workers’ livelihoods, even more so as tens of thousands have recently returned from Thailand amid border tensions.
“It is essential that workers’ benefits are carefully considered,” he said. “When a factory closes, there must be a proper legal solution to avoid negative consequences. The labor ministry and relevant institutions play a crucial role in attracting investment and creating jobs. They should also help workers find new employment.”
