A decision by the chief judge of the Phnom Penh Municipal Court may mean that thousands of former Sam Han garment factory workers do not get wages and compensation owed to them, union officials said this week.
Judge Chiv Kheng on Tuesday dismissed an appeal by the Coalition of Cambodian Democratic Union seeking to block a July court order to confiscate Sam Han property so it could be used to pay back a $908,393 loan that owner Kim Do Sam owes to Union Commercial Bank.
But union officials fear that once Sam Han’s property is sold off by the bank, there will be little money left over to pay wages owed to workers.
Sam Han shut its doors in mid-February and Kim Do Sam, a South Korean national, subsequently left the country, leaving several thousands of the factories 10,000 workers without closure compensation.
“We are afraid we won’t receive our compensation,” the union’s Deputy Secretary-General Kong Athik said. “The court is biased in favor of the rich party.”
But Chiv Kheng said by telephone that the Sam Han property is worth $2.1 million, and that after the bank is paid back there would still be money left over to pay staff.
“There is no reason to stop the bank,” he said.
Ker Soksidney, adviser to Social Affairs Minister Ith Sam Heng, who headed a special Sam Han interministerial committee established after the factory closed, said the bank has verbally agreed to pay the government the first $1.1 million it gets from the sale of Sam Han’s property.
The government is owed $1.2 million, which it lent Kim Do Sam to keep his factory afloat and pay regular salaries to workers after the factory closed.
Seng Sovina, a lawyer for the bank, declined comment on the case.
Lean Chenda, a lawyer for the union, said that the judge ignored the Labor Law’s requirement that workers be paid first upon a factory’s closure.
Instead the Land Law’s clause on collateral was applied, which guarantees that the bank’s right to the Sam Han land title could not be challenged, she said.