Gus Dur wants labor decree reviewed

Gus Dur wants labor decree reviewed

JAKARTA (JP): President Abdurrahman "Gus Dur" Wahid asked
Minister of Manpower and Transmigration Al-Hilal Hamdi on Tuesday
to review the ministerial decree on higher severance pay for
dismissed or resigning workers, saying it had hampered foreign
investment.

The President said the decree, which was issued by then
manpower minister Bomer Pasaribu on June 20, 2000, must be
revised because it has sparked objections from Korean and
Japanese businessmen who are investing in Indonesia.

"Please, review the decree. It is shameful. Such a decree
should not appear again. Foreign people wish to help us but we
make trouble for them. Alhamdulillah (Thank God), Al-Hilal
confirmed the decree is being reviewed," Gus Dur said in an
address to participants of an extraordinary congress of the Labor
Exporters Association (Apjati) at the State Palace here.

The decree, which has also triggered protests from the
Association of Indonesian Employers Association (Apindo),
regulates that employers are obliged to gain permission if they
wish to dismiss their employees and, should permission be
granted, they are required to provide a severance payment as well
a merit or service payment to the dismissed or resigning workers.

In terms of severance pay, according to the decree, a
dismissed worker employed for less than a year will receive 100
percent of his/her gross monthly wage while those employed for
less than two years receive 200 percent of their gross monthly
wage. This scale continues upward to employees who have worked
less than five years at a company. Those who have worked more
than five years will receive 600 percent of their gross monthly
wage.

Regarding service or merit payment, dismissed employees who
have worked between three and six years get another 200 percent
of their gross monthly salary while those who have been employed
between six and nine years gain 300 percent of their gross
monthly salary.

Workers who have been employed between nine to 12 years
receive 400 percent while those employed between 12 and 15 years
receive 500 percent of their monthly wage. The scale continues
upward to those who have worked for 24 years or more receiving
1,000 percent of their gross monthly salary.

The previous decree only ruled that dismissed workers who have
been at a company for at least five years would receive any such
service or merit payment with the highest awarded being 600
percent for those who have worked more than 25 years.

Workers who resign or retire are only entitled to receive
service or merit payment.

Al-Hilal, who also attended the ceremony, conceded that the
decree has created financial difficulties for investors who may
have to dismiss some of their workers but added it is also a
safety net in the event of any arbitrary dismissals.

He said the Manpower and Transmigration Ministry has studied
the decree and found that it may cause difficulties for workers
in the long term because a number of employers may reject the
provision of a pension program for their employees.

He said all controversies surrounding the decree would be
discussed among a tripartite team representing the government,
Apindo and labor unions.

"So, the decree will not be revoked but needs amendment," he
said.

Meanwhile, the Federation of All Indonesian Workers Union
(FSPSI) threatened to call for a national labor strike if the
government went ahead with the review.

"FSPSI, with other labor unions, will call on workers to take
to the streets and we are able to organize a national strike if
the government reviews the decree. The government should maintain
the decree to prevent employers dismissing their employees
arbitrarily," FSPSI chairman Jacob Nuawea said. (rms)