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)