In June 2020, due to shrinking business as a result of COVID-19, the Cambodian government issued a guideline to allow employers from all sectors to postpone the indemnity for seniority due in 2020 to 2021.

However, workers employed at Hung Wah did not accept the delay and demanded the due to be paid. Hung Wah maintained that it would follow the guideline as set by the government. The workers did not agree with this decision by Hung Wah management and decided to go on strike on September 7, and the Cambodian Ministry of Labor and the Garment Manufacturing Association in Cambodia (GMAC) got involved. Consequently, the demand of the workers was forwarded to the Arbitration Council that review cases on disputes when a resolution between the parties cannot be negotiated. They ordered workers to go back to work on 11th of September. Two workers were singled out and suspended on accusations of incitement to strike after an investigation undertaken by the Ministry of Labor. Hung Wah and representatives of workers were scheduled to appear at Arbitration Council on September 22, and we are awaiting the outcome. We have been fully engaged with the supplier and have made it clear that we do not tolerate as buyer that workers are punished for exercising their right to Freedom of Association, as in accordance with our Sustainability Commitment.

The dispute have been resolved by the Hung Wah, and the workers and their representatives in October. We have reached out to Cambodian Union Federation of Workers Spirit (CUFWS) and Cambodian Labour Union Federation (CLUF), federations that the two workers are affiliated to or members, to see whether they have any concern on the resolution. We have not received any complaint or concern to this date.