Garment workers occupy closing factory in Yangon, demand compensation 

After the Hongmiao factory announced with only a few days’ advance notice that it was shutting down, some 80 percent of the employees are entitled to less than 15,000 kyat in compensation

Forced out of their jobs by the shutdown of a garment factory in Yangon, employees are staying in the factory overnight to demand the remainder of their wages and adequate compensation. 

The management of the Hongmiao clothing factory in Yangon’s Shwepyithar Township notified its workers on September 26 that the factory would be ceasing operations in a month, just a year and a half after opening. Three days later, they told the workers they did not have to come in to work anymore, a worker said. 

When workers first demanded severance pay on Monday, management promised that each worker would receive at least 10,000 kyat as compensation, according to the worker.

According to the labour law, employees with less than six months’ service to the company are not entitled to severance payment. Those with six months’ to a year’s service must be paid 50% of their monthly salary while employees with between one and two years’ service must be paid a full month’s salary in severance. 

“10,000 kyat in compensation just won’t do. We still haven’t gotten the payments we’re entitled to either. We don’t trust them at all. That’s why we are waiting for them here,” said the worker occupying the factory, who asked not to be named.

Some 250 workers are now staying in makeshift shelters on the factory compound in protest. 

A representative of the management has come to the factory to negotiate with the protesting workers, according to the worker who spoke to Myanmar Now, but the company was proceeding with the removal of equipment from the factory at the same time.

“Not only did they render us jobless, they also didn’t offer any severance at all to some workers on the grounds that they were working here for less than six months,” the factory worker said.

The company’s response was to issue a statement saying the wages for the month of September would be paid by October 5, and that severance and other payments to which they were entitled would be paid out within a month after the announcement of the shutdown.

However, the company’s statement said only those who had been working at the factory longer than six months would receive severance, and that those with less than six months’ work experience at the factory were only entitled to a basic compensation payment on the grounds of “social compassion.”

The company said it will provide 10,000 kyat for those with one to three months of service, and 15,000 kyat for those with three to six months of service. Six pregnant employees with more than one year of service will be provided 100,000 kyat and five other pregnant workers with less than one year of service will be provided 50,000 kyat, the statement said.

Some 300 employees, out of a total of 374, had been working at the factory for less than six months, meaning that the majority of the workers are not guaranteed any severance beyond the company’s basic “compassion payment” of 10,000 or 15,000 kyat.

The minimum daily wage in Myanmar stands at 4,800 kyat. It has not changed since 2018 despite the high inflation of commodity prices in the country, and is overdue for a required biannual adjustment according to a law previously enacted under the ousted National League for Democracy government. 

According to the worker who spoke with Myanmar Now, the factory’s protesting workforce is asking for compensation equivalent to one month’s worth of wages for each worker, and for all wage arrears to be paid out in one lump sum. 

Myanmar Now contacted Hongmiao’s management by phone to ask what plans they had to negotiate with their employees, but did not receive a response. 

“Prevailing conditions made the workers organise to make these demands. The factory did not give them sufficient notice they were going to close, and orders were still coming in. The workers had unionised, and the employers did this on purpose,” said a leading member of the workers’ union on condition of anonymity.

Some 50 workers who had formed a labour union were dismissed by the Hongmiao company last month. Management claimed there was a lack of production orders as a pretext for their termination.

The labour union leader added that ignoring the union’s requests would be a direct violation of the right to organise as defined by the International Labour Organisation.

Hongmiao, a Chinese-owned garment factory, mainly produces clothing for the Japanese brand FIELDCORE.

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