Ridwan Max Sijabat, Jakarta – Employers are seeking a win-win solution to a deadlock regarding labor law revisions in an effort to create an investment-friendly law that will also provide job security to workers in the country, a spokesperson for employers says.
Indonesian Employers Association (Apindo) chair Sofjan Wanandi told The Jakarta Post that despite the resistance of labor unions, the proposed revisions to the 2003 labor law were crucial in order to attract investors and create more jobs.
Apindo wanted to revise the law in order to encourage foreign investment while making it difficult for employers to outsource or use contract labor, Sofjan said. Businesses have attributed the failure to attract new foreign investment to current labor law, which they have termed "harsh".
"The harsh labor law has remained the main constraint to foreign investment coming here. A revision is necessary and it must serve the majority of investors, who want a flexible labor market. It's the 'easy to hire, easy to fire' principle," he said
More than 1,000 workers from the All-Indonesia Workers Union Federation (KSPSI) staged a rally earlier this month at the House of Representatives to oppose the proposed revisions to the labor law.
Union members and leadership at the House's Commission IX on labor affairs agreed not to include the revisions in the national legislation agenda for 2011.
The government and labor unions have been in a deadlock since 2005, when employers proposed the labor law changes. The 2003 law requires employers to pay severance to dismissed workers of up to 32 months of salary, as well as provide service payments and housing and health allowances. Businesses disagreed with these stipulations.
Such requirements spurred employers to outsource and use contract-based labor, leaving millions of workers unprotected, as they were paid in accordance with provincial minimum wages and were not registered with the Jamsostek social security program.
Despite opposition from some employers, Sofjan said Apindo would continue with its plan to intensify bipartite negotiations with labor unions. Labor union confederations were cautious in responding to Apindo, saying that a win-win solution was easier said than done.
KSBSI chair Rekson Silaban said it was impossible to achieve a solution without employers first making an effort to restore union confidence. "It is better for employers and the government to first improve workers' welfare and provide better protections to show they have a political will and to win workers' confidence to break the deadlock."