Seniority indemnity payments suspended until 2021: Ith Samheng
Phnom Penh: The Labour Ministry on Friday decided to suspend seniority indemnity payments, except for garment and textile factory workers, until December 2021, in order to protect the closure of low profit factory.
In a statement, Labour Minister Ith Samheng said his ministry is informing owners of businesses outside of the garment-textile sector about the decision.
“During the suspension, employers who terminate their employees based on mistakes, retirement or death, must still pay indemnity payments to the workers,” Mr Samheng said. “For those who resigned or were fired before 2019, you will not be paid.”
Labour Ministry spokesman Heng Sour said the move was made to protect the garment and textile sector and discourage them from taking their business overseas.
“Other enterprises in other sectors have strong financial foundations in Cambodia, unlike the garment and textile sector,” Mr Sour said. “So we have to reduce the risk of closure and bankruptcy.”
Far Sally, president of the National Trade Union Coalition, said the move was unreasonable.
“I think it is unreasonable because employees should be paid their indemnity payments every year,” Mr Sally said. “This will affect the livelihood of workers and it could even lead to factory closure.”
Last year, the government issued Directive 443 on seniority indemnity, which requires employers to pay a bonus equalling to half of a month’s wage – twice a year to qualified workers.