Government rejects workers' demands on ministerial decrees

JAKARTA (JP): President Abdurrahman Wahid turned down on Tuesday the demands of the Federation of All Indonesian Workers Union (FSPSI) to nullify two controversial ministerial decrees on labor issues but agreed to give some concessions to protect workers rights.

Citing investors concerns, the President told the Union leaders, that he was fully supportive of the two decisions of the Minister of Manpower and Transmigration Al-Hilal Hamdi which negated employers' obligations to pay severance and service payment to resigning and retiring workers.

The Union chairman Hikayat Atika Karwa quoted the President as saying that the government would not bow to the workers' demands to revoke the minister's Decrees No. 78 and No. 111, issued this year, for the sake of maintaining a conducive investment climate in the country.

The President said the two decrees had to be issued to replace previous ministerial Decree No. 150 following complaints from investors, which the President described as counterproductive to attracting private investment.

However the President also allowed provinces which had implemented the Decree No. 150 to continue the policy if it was deemed necessary.

"In principle the government still sticks to the two decrees and refuses to revert to Decree No. 150," said Hikayat after the meeting.

The source of the dispute derives from the decree No. 150, which was issued by then minister of manpower Bomer Pasaribu in June last year.

The decree obliged employers to pay a severance compensation and a merit or service payment to the sacked employees. According to the decree the employees are entitled to receive 100 percent of their gross monthly wage for each year they have worked at the company. Those who have worked over five years will receive 600 percent of their wages.

The workers also have the right to receive service payment, which totals 200 percent of their gross monthly salary for those who have worked up to six years.

Meanwhile retiring workers are entitled to a service allowance in line with their working period.

Bomer's successor, Al-Hilal annulled the decree following pressure from investors. In his Decree No. 78, issued in April, the amount of the severance payment is smaller and there is no obligation for companies to give service payment to resigning workers.

Decree No. 111, stipulates that companies are required to obey their collective labor agreement if the amount of compensation is bigger than regulated in the decree.

Demo

While Hikayat was meeting with the President, thousands of workers of the industrial town of Sidoarjo, adjacent to the East Java capital of Surabaya, took to the streets again on Tuesday demanding that Decree No. 78 be revoked and the reinstatement of Decree No. 150. They staged a similar protest on Monday.

The workers were from various organizations, including All Indonesian Workers Solidarity Party (FSPSI) and the Indonesian Prosperity Trade Union (SBSI) and Indonesian Workers Front of Struggle (FNPBI).

Several incidents spiced the street demonstration. The protesters threw stones at company buildings when encouraging the companies' workers to join them.

A minibus belonging to PT Trias Sentosa was ransacked and the fence of PT Panggung Elektronik was destroyed, forcing the security officers to alert demonstrators by firing warning shots.

Comr. Soedirman, chief of Surabaya Taman Police, which oversees, among others, Sidoarjo said that some 500 personnel were deployed to anticipate possible rioting.

"We blocked the Waru traffic circle to prevent protesters from entering Surabaya, and we succeeded." (prb/nur)