Govt prepares regulations on wages

Govt prepares regulations on wages

Ridwan Max Sijabat, The Jakarta Post, Jakarta

The government will soon issue two regulations on remuneration
for the formal sector and on industrial relations in the informal
sector, a manpower official said on Tuesday.

Muzni Tambusai, the director-general for industrial relations
at the Ministry of Manpower and Transmigration, said one
government regulation would introduce three remuneration
criteria, while the other would regulate a social security scheme
and provide for simple industrial relations in the informal
sector.

The remuneration schemes in the formal sector would consist of
a minimum wage system, bipartite negotiations and individual
professional negotiations.

"The minimum wage system will remain a safety net to prevent
workers from being underpaid," he said after the opening ceremony
of a national conference on productivity in Jakarta.

Muzni said he could understand why labor unions recently
demanded that the government phase out the minimum wage system
and replace it with a wider scheme that covered informal workers.

"But the problem is not there. The problem is that the labor
market is oversupplied and most employers prefer the minimum wage
system although they are financially able to pay more."

Labor unions recently urged the government to abandon the
regional minimum wage scheme because it was applicable only for
workers employed in the formal sector.

Muzni said the bipartite negotiations would require workers
and employers to agree on remuneration systems at the company
level.

"Of the most importance is that management must be transparent
about its company's financial condition and union representatives
must have skills in bargaining techniques. If managements are
committed to building industrial harmony, they should treat their
workers as partners and be transparent about their companies'
performance," he said.

Muzni said industrial relations had frequently broken down
because of a lack of transparency.

The third method, the direct professional negotiations between
workers and the management, he said, allowed "... professionals
to demand their own salaries in accordance with their skills and
working experience."

In the informal sector, Muzni said the government would
introduce simple industrial relations and social security
programs for workers to enforce the Law 3/1992 on social security
and Law No. 13/2003 on labor.

"We will set daily working hours, a simple remuneration
system, transportation and meal allowances, and social security
programs," he said.

The government has not yet regulated industrial relations in
the informal sector, which employs 70 percent of the nation's
labor force, or more than 60 million people.

Muzni said the government had asked state insurance firm PT
Jamsostek to start introducing social security programs among
workers in the informal sector.

"Thousands of housemaids in Yogyakarta and East Java and
pedicab drivers in Batam, Riau, have participated in the health
and occupational accident insurance programs," he said.