Debatable decree effective for labor protection

Debatable decree effective for labor protection

JAKARTA (JP): The government again reiterated that Ministerial
Decree No. 150/2000 on compensation for dismissed or resigning
employees, would not be repealed despite displeasure from
investors.

Officials defended their decision saying that empirical data
shows that despite its brief lifespan the decree has already been
effective in providing protection for workers against arbitrary
dismissals.

Tianggur Sinaga, spokeswoman for the Ministry of Manpower and
Transmigration, further dismissed the view that the decree only
encouraged workers to commit violations in their work place so
they would be sacked.

Tianggur argued that a labor analysis showing that the
provision of compensation required by the ministerial decree
would provoke workers to commit violations in order to be
dismissed, was baseless.

She said that based on the ministry's evaluation, the number
of dismissals before the decree took effect on June 20 was higher
than after its enforcement.

Labor dismissal cases between July 1999 and February 2000 and
after the decree came into effect between July 2000 and February
2001 were relatively the same with 2,448 and 2,444 cases
respectively.

However the number of dismissed workers between July 2000 and
February 2001 was 79,117, compared to 40,298 between July 1999
and February 2000.

What rose significantly was the compensation paid out which
doubled in amount.

"The compensation paid to dismissed workers between 2000 and
2001 reached Rp 88.986 billion while the compensation during the
previous period was only Rp 44.157 billion," she said.

Despite objections from the Indonesian Employers Association
(Apindo) and numerous foreign investors, these protests should
not be used as a justification for employers to be excluded from
abiding by the decree.

It was issued by former manpower minister Bomer Pasaribu to
replace a 1996 decree on severance pay.

The decree stipulates that companies after gaining permission
from the Committee for Settlement of Labor Disputes (P4) can
dismiss an employee but must provide severance payment and a
merit or service payment to the dismissed worker.

Severance pay ranges from 100 percent of the gross monthly
wage to 600 percent depending on employment length.

Gross monthly wages consist of the basic salary along with
housing, health and food allowances.

Service or merit payment varies. The decree states that those
who have worked between three and six years get 200 percent of
their gross monthly salary.

The scale continues on up to those who have worked for 24
years or more receiving 1,000 percent of their gross monthly
salary.

Workers who resign or retire are only entitled to receive
service or merit payment. Workers dismissed due to an
occupational mistake they committed are still entitled to service
payment.(rms)