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)