Contract system gives workers no job security

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.