Khmer Post Asia Close

Garment employers urged to provide additional allowances in “spirit of humanity”

Thong Sotha​​   On April 26, 2021 - 11:33 am​   In Economics  
Garment employers urged to provide additional allowances in “spirit of humanity” Garment employers urged to provide additional allowances in “spirit of humanity”

With more than 200 factories in the garment, footwear, bags and travel goods sector ordered closed in the capital and Takhmao city, Kandal province, the Garment Manufacturers of Cambodia (GMAC) is encouraging businesses to provide a stipend to the tens of thousands temporarily out of work.

Garment factories in Phnom Penh and Takhmao were ordered to shut on April 14 for two weeks after nearly 800 workers from 36 establishments were found to have contracted COVID-19. The industry is a key pillar of the Kingdom’s economy and employs upwards of 800,000 people. The sector exported some $9.5 billion of goods last year despite the pandemic.

Employers are not obliged to pay employees from April 15 to April 28 in accordance with Article 116 of the Labour Law, but are required to provide accommodation and transportation, or their equivalent value financially.

“However, seeing the hardship our workers are enduring during this critical time, GMAC strongly appeals to all members in the lockdown regions to kindly consider a certain amount of cash allowance to your workers,” said Ken Loo, secretary-general for GMAC.

Loo told Khmer Times that the association has not set a standard amount to be distributed because factories would have to decide how much they are able to allocate individually. He said the industry could see possible penalties imposed by buyers and, maybe, prohibitive air freight costs.

“The lockdowns have resulted in no operations, which means that there are no exports and that could result in some orders not being fulfilled in time. This poses a real danger to businesses because they may not be able to complete purchase orders for clients and will have to pay a significant fine,” he said.

“The industry has been hurting since even before the pandemic, beginning with Everything but Arms [partial removal of European Union trade tariffs] and then leading to the global slowdown. While Cambodia was protected from the virus, we could not escape the economic fallout and the reduced international orders that followed.”

Garment exports were down 10 percent last year, while footwear fell by 11 percent and travel good exports declined by 10 percent.

Firms face an uphill battle as they aim to climb out of the current economic slowdown. While economists have predicted that the pandemic and subsequent recovery will result in a boom equivalent to that post the second world war, the spillover to Cambodia may be inhibited by the most recent outbreak of Coronavirus.

Already, the International Monetary Fund has downgraded its outlook for Cambodia, saying that the Kingdom will see 4.2 percent gross domestic product growth in 2021 – down from its previous forecast of 6.8 percent. Khmer Times