Arientha Primanita & Anita Rachman – After hours of mediation with workers and the government, the Indonesian Employers Association agreed on Wednesday to withdraw its lawsuit against a wage rise decreed by the Banten governor.
"The governor's decrees on changes in regional minimum wages remain," one of the clauses in the agreement read.
After the meeting, Manpower and Transmigration Minister Muhaimin Iskandar voiced relief. A similar lawsuit by the association, known as Apindo, against the West Java governor over wage increases led to a massive labor strike at the Cikarang industrial zone in Bekasi and a worker blockade of a busy nearby toll road for a day.
Last month, in the run-up to the gubernatorial election, Banten Governor Ratu Atut Chosiyah issued a decree raising Tangerang's minimum monthly wage from Rp 1,379,000 to Rp 1,527,150 ($153 to $170). Apindo challenged the decree at the State Administrative Court (PTUN).
While Apindo's lawsuit withdrawal may have prevented a massive strike planned by workers in Tangerang for Friday, some fear the labor camp's victory will create a domino effect across Indonesia, setting up higher costs for industries and investment uncertainty.
However, workers who did not join the meeting expressed concern over a clause in the accord that allows employers who can prove that they are unable to meet the required wage increase to ask the governor for a delay of its implementation.
"[The employers] can ask for a delay at will. This is not over yet," the Greater Tangerang Workers Alliance's Susmita said, vowing to push for a strike on Friday.
Ratu Atut, however, dismissed fears of such a scenario, insisting that the companies must prove their inability to meet the raise. "There is a mechanism for asking for a delay. We will be careful," she said.
Heri Tubagus, one of the workers' representatives, said his organization had a list of which companies had the ability to pay and which did not.
Earlier on Wednesday, President Susilo Bambang Yudhoyono asked that the settlement of disputes over workers' pay demands be free from political interests.
Yudhoyono said achieving better labor relations required the prioritization of the humanitarian, welfare and justice concerns of workers and the continuation of business. "I hope there are no other interests besides the interests of the workers and companies' capacity. Free it from any kind of political interests," he said.
He said that morally, the minimum wage of workers had to continue to improve in line with the growing economy. "Formulate it correctly. It is our moral obligation and responsibility from time to time to assure that the minimum wage of workers becomes better and better and increasingly more appropriate," he said.
However he also said that such increases should bear in mind the different sizes of businesses. "They must all be put into consideration and calculated carefully," he said.
"I am convinced that those who work in micro and small businesses can discuss any problem arising well and can also understand the companies' limits." On the other hand, it would be inappropriate for big companies with increasing profit margins to deny their workers improved welfare, he said.
Yudhoyono also asked that agreements reached between all major stakeholders – the government, the workers and the employers – be honored.