Latief criticized for minimum wage U-turn

JAKARTA (JP): A network of non-governmental organizations yesterday criticized Minister of Manpower Abdul Latief over his decision to allow 215 companies to defer paying the new minimum wages.

"We are disappointed with the decision," the Network of 10 NGOs, as the group is called, said in a statement.

"We find the reason (for the decision) hard to accept," the network's leader, Binsar Effendi Hutabarat, said in the statement.

The minister was not being consistent with his own policy, which called for raising minimum wages while simultaneously allowing 215 companies to defer paying them, Binsar said.

Latief announced this week that the government has exempted 215 companies from the minimum wage regulation because they were experiencing financial difficulties.

According to Binsar, the exemptions were granted mostly to companies in the textile and garment, furniture and handicraft sectors. The 215 companies employ as many as 30,000 workers.

The government on April 1 raised the daily minimum wage levels in 27 provinces by an average of more than 10 percent. At the same time, a new ruling compels companies to calculate the wages of workers, both permanent and temporary, on the basis of 30 working days in a month.

This is the largest exemption ever granted by the government in any given year.

Informed sources said most companies had no difficulties in raising their wages, but they strongly objected to the new method of calculating wages.

Wilhelmus Bhoka, deputy chairman of the Federation of the All Indonesian Workers Union (FSPSI), told The Jakarta Post that he believed the decision was taken after observing all procedures.

"The regulation allows companies to defer paying the minimum wages if they cannot afford it. If all the procedures have been fulfilled, it is then within the power of the minister to grant the reprieve," Bhoka said.

"What, then, can we do?" he asked.

He added that objection would have to come from the respective trade unions rather than the federation. "So far, no one has stated its objection," he noted.

A source in the Ministry of Manpower said the FSPSI was consulted by the government before the deferment was granted. The source said the deferment is only given for a period of one year.

Without the deferment, these companies would go bankrupt and close down. "Then the workers will be out of job," he added.

The Indonesian Prosperous Labor Union (SBSI) questioned the authority of the government in granting the exemptions.

SBSI chairman Muchtar Pakpahan said any deferment should be negotiated between management and workers and not between management and the government.

Instead, the government had taken a unilateral decision in granting the exemption, he said. (16)