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)

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