Contract system gives workers no job security

Fadli, Batam

A single job vacancy has drawn dozens of hopefuls, mostly in their 20s, to an electronics assembly company in Muka Kuning, here.

In the Batamindo Industrial District (KIB), the biggest such district on the island in Riau province, such a sight is commonplace. Although, there are 18 other industrial districts where job-seekers may try their luck.

There are more than 63,000 people working for at least 83 foreign companies in the KIB.

Liasna Boru Sembiring, 22, a job-seeker from North Sumatra, was observed by The Jakarta Post waiting for an interview at engine manufacturer PT Japan Servo, in the KIB.

Liasna told the Post last week that she had worked since 2001 at PT Foster Electrics Indonesia (also in the KIB). The firm produces speakers for audio entertainment equipment.

"I was initially working under a one-year contract, but my contract was extended for a second year, and then, for a third -- I decided to quit after realizing that I would not be hired permanently, despite being offered another extension," she said.

While working at PT Foster, Liasna's basic monthly salary was Rp 497,000 (US$55.00), she also received an accommodation allowance of Rp 77,500, a social security subsidy of Rp 24,300, a miscellaneous allowance of Rp 278,200 and an attendance payment of Rp 20,000. For working overtime she was paid Rp 3,000 per hour.

Liasna could earn around Rp 1 million per month, but without working overtime her take-home pay was just Rp 500,000 to Rp 600,000 a month.

"My salary totaled Rp 1 million after working for three years. But, I couldn't understand why I was not made a permanent employee. Besides which, I was never promoted and remained an operator. I was not alone though, because not many of the 2,000 workers at PT Foster were employed as permanent staff.

Wati, 21, expressed similar frustration that she would never be made a permanent employee of PT Sumitomo Batam Indonesia, which manufactures rubber parts for Toyota and Daihatsu. She said that her contract was only extended by three months at a time, and many of her friends had been told that their contracts would not be renewed.

"I feel stressed toward the end of each three-month period. I pray more, so that -- God willing -- my contract will be extended," said Wati.

Both Wati and Liasna say they have set aside part of their salaries each month, in case they lose their jobs.

After paying their rent, buying food and sending home some money to support their families, they save what's left.

"Saving is important. If our contracts were not extended we would be ashamed to go home," said Wati, who also comes from West Sumatra.

Almost half of the 172,709 workers on Batam are employed according to the Work Contract Between Required Time (KKWT) system. While most feel apprehensive working under the system, they have no choice but to accept it.

Likewise, amid high unemployment on Batam, many are often so eager to work that they overlook the terms of their new contracts.

Coordinator of the Riau Islands Indonesian Prosperous Labor Union (SBSI) Bambang Yulianto, expressed concern over the KKWT system that has been applied by hundreds of companies on Batam.

He criticized the system as benefiting the companies rather than the workers.

Workers nearing the end of their second contract had good reason to worry, claimed Bambang, as it was common knowledge that most would not be employed for a third year.

"It's a bitter reality, but what can the workers do? They do not receive severance pay -- not even a thank you note," he said.

According to the law, only permanently employed workers are entitled to severance pay.

Bambang urged businesspeople to no longer implement the KKWT system, arguing that based on Law No. 13/2003 on manpower, workers must go through a two-year probation period before being appointed as permanent staff. Their contract would be terminated only if they were considered incompetent, he said.

"We call for the government, in this case the manpower minister, to uphold labor regulations in line with the manpower law.

"Companies hiring contractual workers without assuring them of their work status should be given harsh sanctions, so that the employees can be optimistic about the future," he said.