IBRA urged to settle severance pay issue

IBRA urged to settle severance pay issue

JAKARTA (JP): The Indonesian Legal Aid Institute Foundation
(YLBHI) has urged the government to immediately settle severance
pay demands made by employees of the 38 banks closed down by the
government.

YLBHI senior official, Teten Masduki, said in a letter sent to
chairman of the Indonesian Bank Restructuring Agency (IBRA) on
Monday, that the government had to increase the compensation
package because the proposed one was based on 1996 economic
conditions.

"There has to be an immediate solution to prevent the bank
liquidation process from dragging on," he said.

The government closed down 38 banks on March 13 in a bid to
restructure the country's ailing banking industry, making
redundant more than 17,000 employees.

Since the closures, the bank employees have been staging
demonstrations demanding a higher severance pay than the one
proposed by the government.

Their strike has caused difficulties for depositors, whose
funds are guaranteed by the government, to withdraw funds from
channeling banks, due to an inability to obtain account
verifications from bank employees.

Several economists and politicians have supported their
demands, urging IBRA to force the bank owners to provide
additional redundancy payments for their former employees.

Legislator Paskah Suzetta said that based on the 1998 Banking
Law, the government was responsible for settling the severance
pay problem.

Secretary General of the Indonesian Banking and Financial
Sector Workers Association Saepul Tavip, urged IBRA to force the
bank owners to settle the severance pay demand.

Separately, Thomas Suyatno, a chief commissioner at the closed
Bank Aspac, said the owners of the 38 banks had appointed banking
law expert Remy Sjahdeini, as their representative in any
negotiation. (rei)