The global economic recession has hit the Cambodian garment industry, which employs more than 300,000 people, hard. This led to a giant strike in September, and the repercussions are still being felt.
The River Rich factory said that the workers' strike was illegal and decided to sack them, saying they will offer the workers their jobs back, but only if they admit the strike was illegal and promise not to do it again. But the unions do not want to sign anything of the kind, maintaining that their strike was legal.
The Phnom Penh Post reports that last month, the prime minister of Cambodia called for factories to drop complaints against workers related to the strikes.
Tuomo Poutiainen, head of the International Labor Organization's office in Phnom Penh paints the general picture of how unions and management are handling the situation.
"There is maturity on both sides--the employers and the unions--to seriously work on alleviating this disagreement," he said.
For their part, H&M has urged the union and the factory to work out the dispute. In a statement, they wrote, "The H&M office manager in Phnom Penh is in almost daily contact with both the Garment Manufactures Association in Cambodia and our suppliers and we are pointing out the importance of opening up the locked positions and get back to the negotiating table and find a solution in good faith."
Kristina Areskog Bjurling from Swedwatch, a nonprofit organization that monitors Swedish businesses in low-wage countries, told Radio Sweden that how H&M follows up after the negotiations will be key. "For the supplier, this means more costs--both from the strike and if they need to raise wages . . . It's very important that H&M say that they are open for discussing the prices in their contracts. That will be an important thing to get into the picture of how they will solve this situation."