Premier Coffee Compensates Workers but Case Continues

By San Yamin Aung 18 July 2016

RANGOON — Premier Coffee has chosen to compensate 321 workers from its factory in Rangoon’s Hlaing Tharyar Industrial Zone after being sued by the Ministry of Labor, Immigration and Population for breaking labor laws.

However, the case is subject to future court hearings and the charges remain in place—contrary to prior practice in Burma, where voluntary “compensation” payouts by companies signal the de facto conclusion of legal cases launched against them.

Nyunt Win, a ministry spokesperson and the deputy director of the Factories and General Labor Laws Inspection Department, told The Irrawaddy on Monday that, a day before the first court session on July 12, the company decided to pay 57.9 million kyats (US$48,740) to 321 workers (170 male and 151 female) to compensate them for unpaid overtime from the end of last year. The money was disbursed over the following days.

The ministry had received complaints from about 300 workers from the Premier Coffee factory, claiming that they had not received full overtime payment or sufficient days off.

After verifying these complaints, the Factories and General Labor Laws Inspection Department under the ministry filed a lawsuit against the company owner and the human resources manager of the factory at the Hlaing Tharyar Township Court on June 28 for breaking labor laws.

Under Burma’s 1951 Leave and Holiday Act, employers must allow for at least one day off each week without cutting salaries. But the company failed to provide time off or full payment for overtime, which the 1951 Factory Act states should be paid at twice the standard rate.

“The workers were pleased that the company had compensated them, but the trial will continue,” Nyunt Win said. “We don’t know what the verdict will be.”

He mentioned that, in similar cases previously, if a company voluntarily compensated aggrieved workers, the court would either drop the case or order them to pay a fine. If the company chose not to do so, the ministry would give them three warnings before proceeding with legal action.

The next court hearing will be held on July 26.

Premier is popular local coffee-mix brand belonging to the Capital Diamond Star Group, a conglomerate owned by Burmese businessman Ko Ko Gyi. Among the firm’s numerous enterprises are the Grab and Go chain of convenience shops, Capital Hypermarket, and several import and export businesses.

If the company’s owner and human resource manager were to be found guilty, the minimum punishment prescribed under the 1951 Factories Act is three months’ imprisonment and a 2 million kyat fine ($1,680).