Mon, 08 Nov 1999

Government cautions firms on annual bonuses for workers

JAKARTA (JP): With Christmas and Idul Fitri holidays just around the corner, the government cautioned companies to prepare paying employees their compulsory annual bonus which coincides with these religious festivities.

"The government will take strict action against companies which do not pay the Christmas and Idul Fitri incentives to their workers," labor minister Bomer Pasaribu said after receiving International Monetary Fund (IMF) Asia Pacific Director Hubert Neiss in his office on Friday.

According to a 1994 ministerial decree, companies are obliged to give a bonus equivalent to at least one month's salary one week prior to Christmas or Idul Fitri, in accordance to their respective faiths.

The two festive religious occasions are close to each other. Christmas is Dec. 25 and Idul Fitri is expected to fall on Jan. 9.

"Workers will be in need of the annual bonus to celebrate Christmas and Idul Fitri holidays with their family in their homes in Java and Sumatra," said Bomer.

Bomer, who is also the chairman of the All-Indonesia Workers Union Federation (FSPSI), warned that amid the economic crisis, failure to issue anticipated bonuses could stir social unrest.

He said labor rallies in the near future could disrupt political stability and affect economic development.

He also cautioned companies who may scoff at the government's warning, given the light punishment under law for failing to distribute bonuses.

"The light sanctions could take affect as social sanctions as companies failing to fulfill their obligation could be perceived as those who disrespect workers' rights," Bomer remarked.

Punishment for companies in violation of the decree are based on the 1969 Labor Law which threatens a maximum fine of Rp 100,000 or a three-month jail sentence.

Stronger punishment was included in a more recent law in 1997, however, that legislation is still being reviewed by the House of Representatives.


Meanwhile, Hubert Neiss said the IMF fully supported the government's efforts to solve the unemployment problem which had reached an alarming level.

"We support the Indonesian government's policy to give priority to small and middle-scale companies and the farming sector to help solve unemployment," he said, citing that such a policy was an important factor for the international financial institution to provide new loans to Indonesia.

Bomer said the number of jobless was expected to rise to 16.8 million in 2000.

Official figures put the total in 1998 at 14.5 million.

A more worrying issue was the level of "disguised" unemployment of people working less than 35 hours per week, which is expected to rise from 1998 figures of 37.8 million to 42 million next year.

The present number of the national labor force is 102 million.

Bomer expressed optimism that development, with a predicted growth rate of three percent, could occur in the coming year to stimulate new jobs for 1.5 million people.

"The government is optimistic about the economic growth of three percent because of the (expected) inflow of foreign investment to the country," he said. (rms)