The Chung Fai Knitwear Factory in Phnom Penh closed in July 2016 following bankruptcy

The Chung Fai Knitwear Factory in Phnom Penh closed in July 2016 following bankruptcy

A Marks & Spencer and Bonmarché supplier factory in Cambodia that closed down a year ago leaving 208 workers without jobs is yet to settle severance pay and final salaries, according to a labour rights group that is now urging the brands to compensate employees. 

The Chung Fai Knitwear Factory in Phnom Penh closed in July 2016 following bankruptcy a month earlier. Protests followed over unpaid wages, with workers claiming US$550,000 is needed to cover their final month's salaries and lawful severance pay.

On 26 July 2016, the local court issued an injunction order that temporarily froze the assets of Chung Fai, according to the Clean Clothes Campaign (CCC), which says labels carrying the names of M&S, Bonmarché and Canadian brand Nygård were collected by workers in the factory.

M&S previously said it had never authorised the factory to make its products. Bonmarché also initially denied contractual relationships with Chung Fai, but is understood to have later admitted its clothing could have been made at the factory and communicated with its official supplier that no future orders would take place until the case was resolved. Nygård, meanwhile, has denied any involvement.

However, CCC argues the lack of official ties "does not mean these brands had no orders at the factory. If the orders at the factory were the result of subcontracting, this does not absolve the brands of responsibility for workers in their supply chain. The United Nations Guiding Principles on Business and Human Rights (UNGP) clearly stipulates the responsibility of companies to 'avoid causing or contributing to' as well as 'seek to prevent or mitigate adverse human rights impacts' linked to their business relations. That covers all workers in their supply chain."

Consequently, CCC is demanding the companies "take responsibility and give them the legally due payments their supplier failed to provide".

"After their sudden dismissal, the workers – the large majority of them women – were left to fend for themselves. And so they did. They stood up for their rights by preventing the owners from selling the remaining assets from the factory, through physical occupation of the factory as well as legal measures.

"A year after the closure, a solution for the workers is desperately needed. Due to their sudden and unexpected joblessness and the absence of severance payments, the former Chung Fai workers have been left in economic hardship, often forced to take out loans to make ends meet."

The CCC and its UK representative Labour Behind the Label, Workers United Canada, and Maquila Solidarity Network are now launching a public campaign to call on M&S, Bonmarché and Nygård to "take responsibility for the people who made their products for years". This includes paying compensation, actively seeking compensation from the related suppliers and urging the government of Cambodia to take responsibility.