Kartika promises no forced layoffs

JAKARTA (JP): The management of Hotel Kartika Plaza promised yesterday that it will not fire any workers as the hotel closes for as long as three years for major renovations. However, the hotel is offering strong financial incentives to anyone willing to resign.

The hotel's chief commissioner, Brig. Gen. L. Mulyanto, said in a statement that Kartika Plaza has set aside Rp 6.6 billion ($2.9 million) in severance pay for staff who opt to resign.

The statement, written on the stationary of the Army's Information Service and made available to the press, stated that both the management and the Army leadership "strongly hope there will be no layoffs."

Employees who do not opt to participate in the voluntary resignation scheme will continue to receive their monthly pay for the duration of the renovations, the statement said. The management promised that it will rehire workers who choose to resign when the hotel reopens, expected within three years.

The levels of severance pay offered are higher than those mandated under the present labor regulations, it said, adding that the offer stands until Oct. 11.

Employees of the three-star hotel, strategically located on Jl. Sudirman, Central Jakarta, went on strike on Monday after they heard rumors about impending dismissals.

Their action caught the management by surprise and many guests complained about the absence of even basic services. The hotel formally ceased operations on Wednesday.

The hotel is partly owned by PT Wisma Kartika, a business managed by the Army's Cooperative. Last year, 60 percent of the hotel's equity was acquired by businessman Fredy Gozali of PT Luminari.

Under the current renovation plans, the hotel will be enlarged from 11 stories to 35 stories and will become a five-star establishment.

The Ministry of Manpower has reportedly approved the voluntary resignation program offered to Kartika Plaza employees.

Suwarto, the ministry's director general of industrial relations and labor control, said the move was "wise", according to the statement. (03)