Hasyim Widhiarto and Ridwan Max Sijabat, Jakarta – The string of workers' rallies that has severely disturbed businesses recently, particularly in the industrial estates of Bekasi in West Java, Tangerang in Banten, and Batam in Riau Islands, will unlikely be the last.
The silver bullet of the much-awaited revision to the Labor Law, which is expected to put an end to workers' rallies and protracted problems, is unlikely to be passed this year.
"We're trying to immediately submit a draft revision of the law to the House of Representatives so that it can be scheduled for deliberation next year," Manpower and Transmigration Minister Muhaimin Iskandar said recently.
However, Muhaimin said he could not ensure if the revision would be ready before the 2014 general elections. Due to the complicated and sensitive nature of the law, the House has not listed the revision in this year's bill deliberation schedule.
Deputy chairman of the House's Commission IX overseeing manpower, Irgan Chaerul Mahfiz, urged the ministry not to rush the draft revision because of concerns it might ignite uncontrollable workers' protests.
"I've warned the ministry to carefully draft the revision since it has become a sensitive issue for both [workers] and employers in the past few years," Irgan said.
But Manpower and Transmigration Ministry spokeswoman Dita Indah Sari said that the ministry was planning to submit a draft revision to the House within two months.
"We want the House to have enough time to study the revision so that they can consider scheduling the law revision next year," she said.
Revision to the Labor Law remains a hard nut to crack, with workers' unions and businesses regularly failing to come to terms with the revised articles.
The last effort to revise the law was in April 2006. The government backed down following massive rallies that could have turned into riots.
Businesses have seen the 2003 Labor Law as a restriction to hiring more workers that undermines the country's competitiveness because it is deemed to favor workers. For example, it is hard to dismiss unproductive workers without having to provide hefty compensation. A bankrupt company is still required to provide severance pay to laid-off workers that is more than three-times their basic salary.
The law also failed to break down the definition of "decent living standards", which has become a contentious issue when determining annual minimum wages.
The law's handicaps are blamed for the country's inability to benefit from more investment in labor-intensive sectors that is needed to help reduce unemployment, despite average economic growth exceeding 6 percent annually in the past four years.
The number of people unemployed or under-employed topped 42.2 million as of 2011, or around 36.6 percent of the working-age population, according to the Central Statistics Agency (BPS). That figure declined by less than 3 percent from 2010. Existing foreign investors are also jittery over the escalated workers' unrest, particularly during the annual negotiations over minimum wages.
In mid-December, workers ran amok in Batam after demanding higher wages, igniting riots on an island that is supposedly an investment haven. The unrest spread to Bekasi, culminating in the Jan. 27 blockade of the Jakarta-Cikarang toll road, which paralyzed local factories.
History of the labor law
1997: Several laws on labor, manpower and industrial disputes are merged into labor law2003: Megawati administration revises the law into 2003 Labor Law2004: Calls arise from workers for a revision to the law2005: Calls arise from businesses for a revision to the law2006: Yudhoyono administration tries to revise the law, but fails to do so after massive protests2011: The House rejects the government's draft revision as it suspects the draft is a fake.