Laid-off BNI workers agree to $4.2m compensation offer

Laid-off BNI workers agree to $4.2m compensation offer

JAKARTA (JP): After a series of meetings with Bank Negara
Indonesia (BNI), 438 laid-off workers of the state bank accepted
on Tuesday compensation packages totaling Rp 32 billion (US$4.2
million).

Although the date of payment has yet to be set due to
technical problems, the workers expressed satisfaction with the
agreement.

"We're relieved to be able to say that the bank's compensation
scheme finally meets our expectations," said Asikin Yunus, one of
the workers' representatives in meetings with BNI executives.

The last meeting between the two parties was held at the
Jakarta Legal Aid Institute (LBH) on Tuesday, watched intently by
60 former employees from several BNI branches in the country.

BNI previously informed the 438 people -- aged from 53 to
under 55 and employed in positions ranging from low-ranking staff
to heads of branch offices -- they were laid off effective on
July 1 this year. They were told they would receive a full
monthly salary until they reached retirement age of 55 and their
pensions took effect, Muhammad Sadili, one of the group, said.

However, the bank subsequently announced the early retirement
of 750 workers, including the 438, effective on Aug. 1, the
former head of the BNI branch in Harmoni, Central Jakarta, said.

The workers objected because the early retirement decision
canceled their monthly salaries.

Their representatives asked the LBH office on July 7 to seek a
better compensation scheme from BNI.

After six meetings with the bank's executives at the LBH
office, both parties agreed on the new scheme offered by BNI in
which the laid-off workers would receive their full salaries,
including several allowances inclusive of housing, telephone
payments and transportation.

BNI's director of planning and human resources, Syaifuddien
Hasan, told employees on Tuesday: "We've made lots of
compromises. In fact, it would cost us only Rp 17 billion if you
all went back to work until your retirement."

He did not explain the additional costs entailed in the
compensation package.

According to one of the former employees, BNI budgeted Rp 225
billion for the 750 employees, but most of the money was allotted
for employees laid off at its overseas branches.

The bank has branches in Singapore, London, Hong Kong, New
York, the Cayman Islands and Tokyo.

Along with other state banks, BNI agreed to lay off 5 percent
of its workforce in line with the arrangement between the
International Monetary Fund (IMF) and the government to
restructure the banking sector.

The measure is expected to enhance the banks' efficiency and
render them suitable for the government's sweeping
recapitalization program.

A lawyer at LBH, Rita Olivia, believed that BNI used the
recapitalization stipulation as the pretext to lay off the
workers.

"It's odd that BNI would only have to pay Rp 17 billion
without the layoffs, not Rp 32 billion. So where is the
efficiency they are talking about?"

She said BNI should pursue its bad debtors instead of
disrupting the lives of its employees through unsuitable cost-
cutting measures. (03)