Minimum wage report urges stronger ruling

Minimum wage report urges stronger ruling

JAKARTA (JP): The government is considering a proposal to
strengthen its minimum wage regulation by stating that the
"minimum wage" refers only to basic wages and exclude allowances.

Many employers now include allowances in their calculation of
wages.

The proposal was submitted to Minister of Manpower Abdul
Latief yesterday by a council made up of representatives of
employers, workers and the government.

The current regulation, based on a 1990 ministerial decree,
stipulates that the minimum wage set by the government must make
up at least 75 percent of the employee's basic income, with the
remaining 25 percent being allowances.

This stipulation has been subject to various interpretations,
often causing friction between employers and workers.

Each year, the Ministry of Manpower sets the minimum wage
levels for Indonesia's 27 provinces.

The tripartite body concluded its meeting to discuss the wage
problems and a host of other labor issues yesterday by coming up
with a set of proposals for Latief.

"The regional minimum wage is the lowest basic wage received
by workers in a certain area in a single province," according to
one of the points in the recommendation, which was made available
to journalists yesterday.

"This brings an end to the 75:25 formula," Suwarto, the
Directorate General of Labor Standards Supervision at the
Ministry of Manpower, told journalists after the meeting.

The recommendation was signed by Suwarto, Bomer Pasaribu, who
represented the Federation of the All Indonesian Workers' Union,
and R. Moedjianto, a board member of the Indonesian Association
of Employers.

"We hope that the number of labor disputes will be reduced if
this revision is made into a ministerial ruling," Andi Hasbudin,
another union representative said at the meeting, which was open
to journalists.

The employers' association chairman, Suratno Hadisuwito, said
if the proposal is approved, his organization would immediately
disseminate the information to ensure compliance by its members.
"Whether we are prepared or not, we will have to adhere to it,"
he told reporters.

"Employers must strive harder towards efficiency to boost
productivity," he added.

Suwarto said the new regional minimum wage levels may be
announced some time next week. Any changes must be announced at
least three months before they become effective.

The union has been pushing for an increase of between 15
percent and 17 percent for all 27 provinces, taking into account
the 8.5 percent inflation the country registered last year.

The tripartite agency also recommended that the minister make
the rules on workers' dismissals stricter.

A clause in a 1986 ministerial decree states that an employer
cannot dismiss workers on racial, religious and gender grounds,
or because a person has joined a union.

The agency said the rule should also specifically stipulate
that employees cannot be fired because they have been sick for a
period of up to 12 months, gotten married, or become pregnant, or
require maternity leave.

The tripartite body also proposed that the government regulate
dismissals caused by plant closures or corporate takeovers. (anr)