Ministry Sells Property of Closed Factory, Promises Pay for Workers

By Nang Seng Nom 14 October 2014

RANGOON — Burma’s Ministry of Labor said it has auctioned off the property of closed down South Korean factory Master Sports in Rangoon and that it plans to use the money to pay some 650 laid-off workers who have been waiting on severance pay and unpaid salaries for four months.

Maung Maung Hlaing, an official at the Ministry of Labor, Employment and Social Security, said factory properties were sold on Oct 9 for about US$290,000, adding that the ministry expected to receive the payments this week.

“Workers that worked in the factory for more than a year will get a severance pay equal to three months of their salaries. Those that worked more than three months will be given a severance pay equal to two months of their salaries, and those that worked less than three months, a severance equal to their one-month salary,” he said. “But, we have yet to receive the money from the auction.”

At Master Sports, workers received an hourly wage of between 150 kyats and 170 kyats (about $0.15-$0.17), and were paid a monthly allowance of about $20. They could earn overtime payment at 300 kyats per hour.

The factory closed abruptly in late June and workers were dismissed without receiving their salaries for that month. About 700 workers marched to protest in front of the South Korean Embassy on July 17 to demand the payments.

In August, the Rangoon Division Labor Tribunal decided that the factory should provide a severance pay and outstanding salaries to the workers by Sept 16, but the Korean factory owner had left the country and the Labor Ministry resorted to seizing his property in order to pay the workers.

A group of several hundred former workers went to the factory for a meeting with Labor Ministry officials in the hope of collecting their pay on Sept 16. Officials told them, however, to wait until November, sparking anger among the workers, most of whom are poor women with families.

Hundreds of police were called to the factory compound and workers alleged that they were beaten, and that about a dozen workers sustained injuries.

According to Mar Mar Oo, a labor affairs activist from the 88 Generation Peace and Open Society, many of the 650 workers have been facing hardship since the factory closed down because other garment factories are hesitant to hire them because they protested to demand outstanding payments from Master Sports.

“They [factory workers] are indebted. They will only be able to pay their debt when they get severance pay. Meanwhile, other factories are not willing to hire them because of their negative image with Master Sports. In fact, the workers did nothing wrong. They were just demanding their rights,” said Mar Mar Oo.

She added that the ministry had requested factory owners to hire the laid-off workers, but to no avail.

U Htay, a lawyer specialized in labor disputes, said the money from the sale of factory property should be able to cover the workers’ payments, adding, “The Labor Ministry has calculated that a severance of 210 million kyats [about $220,000] shall be paid to over 650 workers.”

He added that laborers faced a challenge in finding new employment. “The workers are in real trouble, just only over 100 workers have gotten new jobs,” said U Htay, who has been helping the workers during their dispute.

Tens of thousands of workers are employed in labor-intensive industries at 14 industrial zones around Burma’s commercial capital. Garment and footwear factories are the biggest industrial employers, with about 100,000 workers total.

A survey of factory workers in Rangoon released last year said factory workers suffer from a range of labor rights violations, such as long working hours, unsafe conditions and intimidation for joining labor unions, while most are paid “extremely low” basic wages of between US$25 and $37 per month.

Under the previous military regime labor activism and unionization was banned, but with the start of political reforms in 2011, a labor movement has been slowly growing, mostly among the predominantly female industrial workforce.

Strikes over salaries and labor rights have become more common and last year alone, there were reportedly about 900 cases of labor disputes.