Govt warns of sanctions over annual bonuses

JAKARTA (JP): The government will impose administrative and social sanctions against companies which refuse to pay their workers Christmas and Idul Fitri bonuses, Minister of Manpower Bomer Pasaribu said on Tuesday.

However, he said the manpower ministry would not file lawsuits against companies for violating the ministerial decree on annual bonuses because the punishment they would incur -- a Rp 100,000 fine -- was "too lenient".

The current Manpower Law threatens a maximum legal fine of only Rp 100,000 or a three-month jail sentence for companies which breach the ruling.

"Many companies will prefer being fined Rp 100,000 to paying the bonus which equals one-month's salary," Bomer said in a seminar on labor standards here.

The 1997 Ministerial Decree on Holiday Bonuses stipulates companies are obliged to pay bonuses to their workers, and the payment has to be made at least seven days before Christmas (for Christian workers) and before Idul Fitri (for Muslim workers).

He predicted no less than 1.5 million workers will leave Jakarta for their hometowns to celebrate the post-fasting Idul Fitri holiday, which is expected to fall on Jan. 9.

Bomer said the government would resort to administrative sanctions and the blacklisting of errant companies.

"Apart from warnings and blacklists, they will be made public for not paying the mandatory bonuses," he said.

He said only companies worst affected by the protracted monetary crisis would be exempted.

"Companies which claim they are facing bankruptcy or remain on their way to recovery should deliver an official request to delay the payment of the bonuses. They will be audited to prove they do not cheat," he said.

No companies have so far requested exemption from the regulation, according to Bomer.

Bomer warned blacklisted companies would face difficulties in marketing their products, both at home and overseas. Errant publicly-listed companies will find obstacles in offering shares on the local stock market, he added.

He said the public and the press should play their role in imposing social sanctions against companies which fail to respect workers' rights.

He said companies which violate the decree three times in a row for unexplained reasons will be disqualified and their operation licenses revoked.

"It is the right time for the government to take strict measures against managements which lack commitment to improving labor conditions in Indonesia," he said.

He said the government would no longer maintain a cheap labor policy to lure foreign investors, but will instead encourage local and foreign investors to respect workers' rights in order to give their products a competitive advantage both in local and international markets. (rms)