Wage hike dispute ruling overturned

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.