Extra month of salary now compulsory

Extra month of salary now compulsory

JAKARTA (JP): Good news for workers: The government has made
it compulsory for all companies to pay their workers an extra,
`13th month' of salary each year.

The decision, contained in a new decree by Minister of
Manpower Abdul Latief, immediately drew criticisms from Apindo,
the association of Indonesian employers, who said they were never
consulted about the move.

The All Indonesian Workers Union (SPSI) welcomed the move,
saying that this would spare workers from having to go on strike
each year to insist on getting their entitlements.

The issue of the extra month's salary, traditionally given
ahead of the Moslem Idul Fitri holiday, has been a source of
constant friction at a number of companies.

In the past, the government has simply stated that the THR, as
the 13th month salary is known locally, is strongly recommended
but not obligatory -- raising different interpretations from
workers and employers alike.

The decree, signed by Latief on Sept. 16, requires all
companies to grant their workers the 13th month salary, timed
with one of the major religious holidays. Management who fail to
do so are liable for criminal prosecution; if found guilty, they
face a three-month jail term or a Rp 100,000 fine.

The decree also stipulates that the THR must not only include
the basic salary but also the workers' fixed allowances.

"The THR is part of the workers' income entitlement,"
according to the decree.

The money should be paid to Moslem workers ahead of Idul
Fitri, Christians ahead of Christmas, Hindus ahead of the Nyepi
Day, and Buddhists ahead of Buddha's Enlightenment Day. "To allow
people to celebrate these religious days, it is appropriate that
employers provide them with THR," the decree said.

Companies who cannot afford to pay the workers' full
entitlement could apply for leniency from the Ministry of
Manpower two months before the THR is due, and the ministry will
assess the size of the payment.

The decree applies to private and state companies alike. It
makes no mention of the civil service, whose four million members
are among the country's lowest paid workers, who never receive a
THR.

"We truly appreciate the new decree," SPSI Deputy Chairman
A.V. Datuk Bagindo told The Jakarta Post. The move will reduce
the number of industrial strikes in the future, he said.

As it is, the number of industrial disputes has drastically
fallen over the past year. This is due largely to the fact that
most companies are now complying with the government's minimum
wage regulations, another source of friction between labor and
management in the past.

Bypassed

Apindo Chairman Soeratno told the Post that, as far as his
organization was concerned, the old decree stipulating that the
13th month salary is given on a voluntary basis still stands.

"We will not abide by the (new) decree because the government
has bypassed Apindo in drafting the decree," he said.

Apindo is also opposing the level of the THR set by the
decree. Previously, companies were free to set the level of THR.

Bagindo denied the suggestions that Apindo was not consulted,
however, stressing that Soeratno knew full well that the
association leaders were asked to comment on the draft of the
decree.

Suwarto, the Director General for Industrial Relations and
Labor Standards at the Ministry of Manpower, said the decree was
a piece of government policy and, therefore, Apindo and SPSI did
not necessarily have to be consulted prior to its creation.

"It was a decision made the government to improve the labor
conditions in the country. Apindo and SPSI, in this case, must
comply with it, period," Suwarto said somewhat emotionally after
learning about Apindo's reaction.

He also refuted Soeratno's suggestion that Apindo was never
consulted, pointing out that its representatives attended a
number of meetings to discuss the draft of the decree.

"There is no excuse for Apindo not abiding by the decree," he
said. (rms)