Wage hike dispute ruling overturned
Tertiani ZB Simanjuntak, The Jakarta Post, Jakarta
The government's policy to raise workers' minimum wage gained momentum on Wednesday when the State Administrative Court overturned an earlier injunction which had delayed the implementation in Jakarta.
Businesses who cannot afford to pay the new minimum wage, do however retain the right to file an objection with the government to obtain a grace period.
However, most business owners insisted that regional administrations should stop setting the minimum wage unilaterally without involving them. They said that the policy could kill their respective businesses.
The Jakarta State Administrative Court revoked its injunction -- pending a final decision on the lawsuit -- temporarily postponing the Jakarta Gubernatorial Decree No. 3052/2001 which requires a 38 percent increase in minimum monthly wage for Greater Jakarta to Rp 591,266 (about US$60).
The wage increase, which also applies to other provinces across the country with an average increase of more than 30 percent, took effect on Jan. 1, 2002.
The case was filed by the Indonesian Employers Association (Apindo) on behalf of its 700 members and the Jakarta chapter of the Indonesian Chamber of Commerce last December.
Minister of Manpower and Transmigration Jacob Nuwa Wea lauded the court's decision on Wednesday, implying that the businesses should now comply with the policy which is made by each regional administration after considering the cost of living in each province.
Jacob said that the doors were always open for the businesses to file objections with the government on the minimum wage so long as they could prove they could not afford to pay it.
The government has offered a one-year grace period for companies which cannot meet their obligation due to financial difficulties.
The companies will have to first file a request with the local administration or directly to the Ministry of Manpower and Transmigration before they have their finances examined by an independent auditor.
The policy was announced several weeks ago, according to Jacob, but only 10 companies have filed objections due to financial difficulties. His office was still checking the financial conditions of those companies.
"If the companies were declared incapable of complying with the new wage level, I appeal to all workers not to go on strike or perform a slow-down. Workers should understand their employers' difficulties during this economic crisis," Jacob said.
He promised support to facilitate establishment of an adhoc judiciary to settle conflicts between employers and employees with his ministry as the mediator.
Jacob said that the employers should now start to consider implementing internal policies of a regular raises for workers so that they could meet the minimum wage that the government sets on regular basis.
Jacob was speaking to journalists after witnessing the renewal of cooperation between the Association of Indonesian Cigarette Factories (GAPPRI) and the Federation of Clove Cigarette, Food and Beverage Workers (FSP RTMM).
GAPPRI's chairman Ismanu Sumiran said that the members complied with each region's policy on the wage increase although most of its members were only small- and medium-sized businesses.
Apindo's secretary general Djimanto told The Jakarta Post on Wednesday that the revocation of the court's ruling would make him reverse the decision to stick to the old minimum wage level.
The ruling revocation means that the court will proceed with a lawsuit against the government to reach a final decision of whether or not the gubernatorial decree should be annulled.
However, according to Djimanto, Apindo will not comply with the decree while the case is pending.
"We can... but then we'll die (go bankrupt). And if we lose the case...we will appeal to the higher court.
"It's better this way: (Jakarta Governor) Sutiyoso revokes his decree while we retract our lawsuit. Then we, the workers and the government will sit together discussing a proper wage increase which will not kill the companies," he said, adding that 80 percent of Apindo members are now having financial problems.
Djimanto said the grace period given to companies which cannot pay the minimum wage is not effective because, for some businesses, even last year's minimum wage of Rp 426,250 was too much of a burden for them.
The regional wage increase has caused problems nationwide with the some workers staging strikes and others scaling back their productivity.
The employers have also threatened to stop hiring new workers or to move their businesses to other regions with lower regional minimum wage levels.