New pay system sought to end labor conflicts
New pay system sought to end labor conflicts
BANDUNG, West Java (JP): A labor activist and a businessman
proposed yesterday that Indonesia establish a national
remuneration system because the wage levels dictated by the
government are not entirely acceptable.
Labor activist Suradi Idris and entrepreneur Rienaldo Thamrin
said they believe a national remuneration system would prevent
labor conflicts sparked by poor wages.
At present, the government sets the minimum wage level for all
companies in each of the 27 provinces across the country.
Suradi, chairman of the textile and garment sectoral trade
union, said that a remuneration system acceptable to employers,
workers and the government, was urgently needed in line with the
robust growth of the industrial sector and the increasing foreign
investments in Indonesia.
"The numerous labor strikes demanding pay hikes and many
companies' refusal of the regulations are indications that the
government's policy on the minimum wage level is not entirely
acceptable," he told The Jakarta Post.
He said that of over 150,000 companies in Indonesia, around 30
percent, or 50,000, are joint ventures and foreign companies
partly owned by entrepreneurs from Japan, South Korea, the United
States, Australia and Taiwan.
The joint and foreign companies apply the remuneration system
used in their respective countries, he added.
Suradi warned that in the industrialization era, problems
related to industrial relations, such as wage systems,
occupational safety and freedom of association, will become more
complex.
"And if businessmen and the government fail to handle such
problems, the industrial relations in the country will worsen
and, subsequently, disrupt the nation's development and undermine
national stability," he said.
Rienaldo, the deputy chairman of the Association of Indonesian
Businessmen, said that the establishment of a national wage
system was urgently needed in efforts to create a better climate
in which to do business in the country.
"Time has come for fast growing Indonesia to have a national
remuneration system acceptable to all sides and in all sectors,"
he said.
Rienaldo, who owns several factories in Jakarta, Tangerang and
East Kalimantan, said having an established wage system will make
it easy for investors to calculate their labor costs.
Besides, the employers will not be faced with industrial
conflicts over wage levels.
"I think businessmen in general need security to operate their
companies and want to create harmonious industrial relations with
their workers," he said.
Japanese system
The Chairman of the Association of Indonesian Businessmen,
Hadi Suratno, who backs the idea of the establishment of a
national wage system, said Indonesia should take the Japan
remuneration system as a model.
The Japanese system, he said, emphasizes the principle of
"justice" to both employers and workers.
"The Japanese wage system will be very good if applied in
Indonesia because it is based on the profit of companies," he
said.
Under the Japanese system, besides receiving monthly salaries,
workers also obtain a certain portion of their company's profits
and dividends.
He said the Japanese wage system was established when it
started to develop its industry in the 1940s.
"The number of labor conflicts, especially industrial strikes,
is very small in Japan because that country has a good system
through which employers treat their workers as partners," he
said. "Such a partnership is necessary to help create industrial
harmony in companies." (rms)