Burma’s Ministry of Labour, Employment and Social Security announced on Friday its intention to sue the South Korean owners of the closed Master Sports factory in Rangoon’s Hlaing Tharyar Township over unpaid compensation claims for more than 750 workers.

Ministry of Labour, Employment and Social Security director-general Myo Aung said that the Factories and General Labour Law Inspection Department will proceed with legal action against the firm owners over claims they failed to fully implement social security terms for their workers.

“We are suing them for not honouring the agreement between owners and workers,” he said. “The owner of the factory has also broken contractual agreements by not paying salaries and failing to issue workers with social security cards.”

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Until last month, Master Sports, a sports footwear firm, manufactured shoes at a plant in the Hlaing Tharyar industrial zone, west of Rangoon. Citing unprofitability due to a lack of orders, the Korean company announced its closure on 26 June, allegedly without prior notice, leaving 755 employees jobless, though staff said the management promised to pay them compensation.

The Ministry of Labour, Employment and Social Welfare stepped in on 10 July by writing a letter to the South Korean embassy which, in turn, mediated a solution whereby the company agreed to pay the employees their June salaries. However, only 56 of the workers agreed to accept the one-month salary payment; the rest demanded additional compensation. The majority of the workers at the factory are women.

More than 700 of the workers demonstrated in front of the South Korean embassy in Rangoon on Friday, demanding compensation claims be met.

The South Korean embassy has so far refused to comment on the case.