IBRA to take on up to 30% of closed banks' employees

JAKARTA (JP): The Indonesian Bank Restructuring Agency (IBRA) plans to recruit from 20 percent to 30 percent of the 17,000 employees laid off following new bank closures, the agency's vice chairman Eko Budianto said on Saturday.

"About half of the closed banks' employees who could not be recruited by IBRA can still stay for one to two months at their banks to help the agency do the final reconciliation work on the closed bank," he said.

He guaranteed all of the workers affected by the closure of the 38 banks would receive severance pay, merit allowances and compensation for loss of work and benefits.

Based on Manpower Minister Decree No. 3, 1996, he said, employees who worked for less than one year would receive two months salary as severance pay, while those having worked for four years or longer would be entitled to 10 months salary.

For merit allowances, valid for employment of a minimum five years, employees of five years to 10 years are entitled to two months salary. Those employed 25 years or longer will receive six months salary.

In addition to severance pay and merit allowance, employees also receive loss compensation for unused annual leave or outstanding medical benefits.

The government on Saturday closed 38 insolvent banks and took over seven others in a massive bank restructuring program. It also agreed to recapitalize nine banks.

Eko said severance package payments would be made in April but in the meantime employees would remain on the payroll.

He said some employees recruited by IBRA would be assigned to oversee the assets of the closed banks.

IBRA has prepared a number of programs for the dismissed workers, including opening employee grievance settlement centers, which would help arbitrate any disputes over severance entitlements.

The center, located at Plaza Bapindo, will open on March 20.

Other programs include a job and business opportunity fair, with participation from companies in various industries seeking employees or offering investment opportunities in sectors such as agribusiness or trading. (02)