Labor law to woo investment
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.