Semen Cibinong fires 600 temporary workers

Agus Maryono, The Jakarta Post, Purwokerto, Central Java

The Cilacap plant of the country's third largest cement producer PT Semen Cibinong recently dismissed 600 of its 900 temporary workers in the name of efficiency, an official said here on Monday.

The plant's community relations and security affairs manager, Tribowo, said the company decided to terminate the 600 workers following the sale of 74 percent of Semen Cibinong to the Switzerland-based international cement firm, HOL Cim.

"PT Semen Cibinong's Cilacap plant was considered to be overstaffed by 1,700 workers (both permanent and temporary). And with a total debt of US$500 million, the decision to terminate the temporary workers was unavoidable," Tribowo said.

Besides dismissing the temporary employees, the company has also offered its 800 permanent employees early retirement.

"For those applying for early retirement, they will receive their monthly salaries until December of this year," Tribowo said, adding that 27 permanent employees had accepted the offer so far.

He said the company paid out Rp 8.5 billion ($944,444) in severance benefits to the 600 workers.

"On average, we gave each of them severance pay equal to their salary for 23 months, as required by government regulations," the official said.

Tribowo insisted the dismissal of the 600 workers was a necessary step, because the plant did not have enough work to go around for all of its employees.

"There were lots of workers standing around talking during working hours because there was nothing for them to do. This could have a negative impact on other workers who are working," he said.

The Cilacap plant has an annual production capacity of 4.1 million tons of cement. However, the plant is only able to operate at 60 percent of capacity this year, he said.

The plant produces cement under the Nusantara brand name. Eighty percent of its products are exported, while the remaining 20 percent is sold domestically.

Though Tribowo said the dismissals were necessary, the 600 fired temporary workers staged a protest at the Cilacap regency legislative council on Monday.

The workers claimed the terminations were unilaterally carried out by the cement company, and they also demanded more severance pay than the company was offering.

As of Monday afternoon, the two sides had not settled their differences.