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Burma’s Deputy Labour Minister Htin Aung has announced that the now defunct Master Sports footwear factory is obliged to pay severance packages and outstanding salaries to more than 700 laid-off workers.
He said the compensation will amount to over 200 million kyat, nearly US$200,000, and is to be paid once the factory building and equipment are auctioned off on 9 October.
According to the Labour Ministry, the factory and equipment has been estimated between 120 and 160 million kyat, but could fetch higher bids at the auction.
Master Sports has yet to confirm the Labour Ministry’s statement.
Htin Aung’s comments come after an incident in Rangoon on Tuesday in which some 20 former employees of the factory were injured during a standoff with police after it is alleged they held an official captive at the facility.
A group of workers went to the Rangoon factory that day to negotiate with representatives of the Department of Labour, which was tasked with carrying out an August court ruling that the workers should receive compensation for sudden dismissal.
The group became irate when the Labour Department’s Director-General Win Shein was unable to provide exact information about when and how the workers would be paid. A worker told DVB that the official said only that the workers will be paid after the factory is auctioned off on 9 October.
The workers then decided to stay at the factory in what they called a “sit-in”, and reportedly said that they would not let the official out of their sight until he gave them an absolute date for their payment.
Police arrived on the scene later in the day to remove Win Shein, ultimately leading to a physical skirmish between police and the group of workers.
Win Shein told DVB that nine police officers had also been injured in the fracas.
At a press conference in Rangoon on Friday, a spokesman for the factory workers rejected accusations that they had held Win Shein against his will.
More than 750 mostly female workers were dismissed by the factory’s South Korean management when the facility was suddenly shut down in late June.
The company’s owner and his affiliates are still at large, as they left the country shortly after shutting down the factory.
The employees, who claim they were not given advance notice of the closure, received assistance from the Ministry of Labour, Employment and Social Security to seek legal recourse. The ministry eventually brokered a deal through with the help of the South Korean embassy whereby the company agreed to offer one month’s pay as severance; however only 56 of the 755 dismissed workers accepted the package.
Workers protested at the South Korean embassy in July to demand additional compensation. They later claimed the company had coerced some employees into signing predatory agreements relinquishing severance.