PPD workers object to reduced severance pay

Bambang Nurbianto Jakarta

Around 700 employees of state bus operator PPD have demanded they receive severance pay of 50 times of their monthly salary as previously agreed to in a meeting between employees, company management and the House of Representatives earlier this year.

PPD employees legal advisor Azas Tigor Nainggolan told The Jakarta Post on Wednesday the workers were dissatisfied with the management's decision to cut their severance pay to only 34 times their salary.

"They can't accept this unilateral decision by the management," Tigor said after a meeting with worker representatives here.

As part of the company's restructuring plan, PPD management plans to dismiss about 2,000 of its 5,149 employees, including bus drivers, crews and administrative staff.

The dismissal of about 700 workers is the first phase of the restructure.

An employee, who requested anonymity, said the company had promised to prepare about Rp 34 billion (US$3.78 million) in cash to compensate the dismissed workers.

However, the company's new executives were now arguing they did not have enough money.

"We don't believe the reason given by the management -- that they don't have the money. The new executives must implement the decision made by their predecessors," the worker said.

Tigor blamed the State Minister of State Enterprises office for approving the management's proposal to cut the payout.

"Due to the cut, the workers are now alleging there were corrupt practices involving officials from the PPD management and the state minister's office," he said.

Currently, PPD has about 350 buses and 5,419 employees. To make the company financially healthy, it wants to reduce the number of workers to about 3,000 people. PPD also plans to buy a new fleet of 170 buses this year.

Company administrative and financial director Hendarpo said the restructuring would cost from between Rp 100 billion and Rp 150 billion.

The employees said while they had agreed with the company's restructuring plan, workers becoming eligible for pensions must be paid a fair compensation.

"I support the restructuring program but I hope we, as the workers, won't be sacrificed for it," another employee said.