M. Taufiqurrahman, Jakarta – The new labor rules governing dismissals and setting redundancy payouts will focus on low-income employees with monthly wages of below Rp 2 million (US$222), the head of the national insurance company says.
Suspended PT Jamsostek president Iwan Pontjowinoto said the new scheme would protect the rights of blue collar workers.
"Those who receive a salary of less than Rp 2 million (a month) will be taken care of by PT Jamsostek," Iwan told representatives of labor unions who attended a seminar organized by the Indonesian Democratic Party of Struggle on Sunday.
Last week, Jamsostek's board of commissioners suspended the Iwan as the company's president director in an effort to solve an internal rift and a prolonged leadership crisis.
The board then named director of operations and services Andi Achmad as caretaker until the company's board of directors named a definitive president.
Data from the Central Statistics Agency shows 97 percent of the country's labor force is paid below Rp 2 million a month. However, many of these workers are employed outside the formal sector and are not covered by Jamsostek programs.
The new rules were agreed to by employers, the government and labor unions. However, there seems to be disagreement in the Cabinet as to whether Jamsostek will administer the scheme.
Manpower and Transmigration Minister Erman Suparno said last week PT Jamsostek should run the program.
His comments came after Vice President Jusuf Kalla said the government was considering privatizing the scheme. Speaking to the seminar, Erman argued that private companies should not be allowed to manage the program because the government had entrusted PT Jamsostek to ensure workers' job security.
Appointing Jamsostek is also in line with International Labor Organization conventions on basic workers' rights, he said.
Erman, however, also told the forum that the government, union representatives and employers were still working out the details of the program.
"This scheme is being drawn up to honor the rights of thousands of workers who were left to fend for themselves after their employers went bankrupt and fled the country," he said.
The new scheme is part of the government's commitment to provide proper social security for workers, he said.
The minister said while blue collar workers were the main focus of the scheme, all employees would be entitled to redundancy payouts.
"It's not true that those who are paid above Rp 5 million a month will not be covered by the scheme."
By passing the regulation the government was keeping its promise to employers not to amend the 2003 Labor Law, he said.
"The labor law is silent about redundancy payouts and we will not amend it, yet at the same time we will respect the rights of workers."