Govt firm on minimum wage policy
Govt firm on minimum wage policy
PADANG, West Sumatra (JP): Unmoved by waves of protest, the
government said yesterday it won't review its policy of raising
the regional minimum standard by 10.6 percent as of April 1.
Minister of Manpower Abdul Latief made it clear that the
government has no intention of negotiating a compromise with
employers on the issue.
"The decree (on the pay hikes) must be upheld. There is no
compromise," he told journalists here yesterday.
The government's regulation on the new minimum wage standard
has been met with strong opposition, mainly from labor intensive
small and medium-sized companies.
They fear that the policy will produce high production costs
which could lead them to eventual bankruptcy.
Tycoons Sofyan Wanandi and Aburizal Bakrie have proposed that
the government be flexible, allowing small companies one or two
years before they are required to implement the regulation.
Sofyan, president of the Gemala Group, called on the
government and small-scale companies to sit down and find the
best solution to the problem.
About 300 small and medium-scale businesses -- mostly textile,
garment, footwear, electronic and furniture companies -- have
threatened to file a lawsuit against the manpower minister if the
new ruling is not reviewed.
They also demanded that the monthly wage for permanent workers
account for 26 working days, instead of the 30 working days
stipulated in the decree.
Aburizal, chairman of the Indonesian Chamber of Commerce and
Industry, said Wednesday that the government and employers should
hold a dialog to seek a peaceful solution to the dispute.
He said the government should hear what the small and medium-
size companies have to say about the new ruling. The government
should enforce the regulation in a fair manner, he added.
Latief called on companies unable to pay their workers in
accordance with the government's new regulation to request an
exemption.
He criticized the employers who have threatened to sue the
minister as a way of settling the dispute. The move will only
worsen the situation, he argued.
"It is time for employers to avoid confrontation with the
government, because the problem can be solved at the negotiating
table," he said.
He added that the government has attempted to be fair by
offering financially troubled companies a chance to postpone
implementing the regulation if they have acceptable reasons.
According to Aburizal, out of 160,000 registered companies,
387 have filed request for postponement. Of these, four have been
turned down, one accepted and the others were still being
processed.
The government has raised the daily minimum wages across the
country by 10.6 percent, which came into effect as of April 1,
1996.
The 1969 Labor Law states that employers failing to pay their
workers the government-set minimum wage are liable to three-
months' imprisonment or a Rp 100,000 fine.
Meanwhile, Director General for Industrial Relations and Labor
Standards Suwarto called on the Association of Indonesian Textile
Companies (API) to abide by a recent agreement on a minimum-wage
delay between the association and the government.
"API should stick to the agreement, and those financially
unable to implement the ruling may seek exemption from the
ruling," he said. (rms)
Editorial -- Page 4