Labor law to woo investment
Moch. N. Kurniawan, The Jakarta Post, Jakarta
The House of Representatives endorsed on Tuesday the manpower bill, previously known as the labor protection and development bill, aimed at giving more legal protection to workers but at the same time creating a positive investment climate in the country.
The bill, which guarantees the rights of both workers and employers, will now be submitted to President Megawati Soekarnoputri to be signed into law. Should Megawati fail to sign the bill, the draft will automatically become a law after 30 days.
Dozens of trade unions under the Coalition for Anti- Suppression on Workers (KAPB), however, staged a boisterous rally against the draft in front of the House compound, claiming it suppressed worker's rights because it did not allow children to work and minimized compensation for laborers dismissed for committing crimes.
Meanwhile, the Indonesian Employer Association (Apindo) still objected to one article on severance payments to dismissed workers, although it agreed on most other articles.
Secretary General of Apindo Hasanuddin Rahman said the severance payment of nine times the monthly salary was too high for employers -- the House made a last minute change on the payment from 12 times the monthly salary -- as it was higher than the current payment of seven month's salary.
Major labor unions such as the Federation of All Indonesian Workers Union (SPSI), and Reform SPSI have accepted the new law.
Suryachandra, leader of the House Special Committee told the plenary session that the new law would give protection to workers and certainty to employers to invest here.
One crucial point that could benefit both parties is that laborers who stage a strike against a company's policy would be paid by employers, but employers and authorities must be given notification of any strike and it must be carried out at the workplace.
If workers violate the strike procedures, the strike is considered illegal and employers can temporarily prohibit workers from entering the factory's complex without paying their salary.
At present, employers are often worried about unruly labor strikes which can be conducted at anytime and anywhere, thus disrupting the company's production, and yet employers are still required to pay striking workers.
The lingering labor strikes in the country has been blamed as one of the main factors for the relocation of so many companies to countries such as Vietnam and China.
The law also stipulates that working hours are 40 hours per week, which is still quite competitive with those in other developing countries. For comparison, Vietnam and China have 48- hour work weeks.
Employers also do not have to pay compensation for a worker who resigns voluntarily or is dismissed for committing crimes, except the worker's accumulated benefits, according to the new law.
The new manpower bill would replace manpower law No 25/1997 and other obsolete laws, which have been rejected by all labor unions for not protecting their rights.
The House of Representatives has revoked the Manpower Law No 25/1997 and implemented various obsolete laws including Law No 12/1948 on Work, Law No 7/1963 on prevention of strikes and lock- outs in vital firms, Law No 14/1969 on Basic Principles of Manpower to avoid overlapping regulations.
But according to the explanation of the new law, the obsolete laws have placed the country's laborers in a vulnerable position.
The endorsement of the manpower bill is actually a reflection of the mutual understanding between several major labor unions and Apindo.
After the endorsement of the manpower bill, the House will continue to deliberate on the industrial relations dispute settlement bill, which will replace Law No 22/1957 on industrial dispute settlements.