APSN Banner

Employers accuse W. Java governor of overstepping authority with latest wage adjustment

Jakarta Globe - January 5, 2023

Bandung – The West Java branch of the Indonesian Employers Association, or Apindo, slammed Governor Ridwan Kamil on Thursday for his decision to include the employment period as an extra factor to increase the provincial minimum wage beyond provisions from the central government.

Ridwan has issued a gubernatorial decree that mandates employers to give an extra wage rise to workers with an employment period of one year or longer.

West Java, which has among the country's highest monthly minimum wages at the district level, is the only province to apply such a requirement.

The association said it's "very disappointed" with the decree and opposes its implementation.

"The intervening gubernatorial decree which rules a pay rise above the minimum wage standard on the basis of 'wage scale and structure' proves that the West Java governor has overlapped his power and issued a decree in violation of the Indonesian rule of law," the association said in a statement.

The West Java Apindo argues that the wage structure and scale are the exclusive domain of employers after the provincial minimum wage is determined by the central and provincial governments.

"The governor has no authority to impose a rise above the minimum wage," it said.

Ridwan has used the employment period as a factor to adjust the minimum wage since last year, which also met resistance from the Apindo who filed a lawsuit with the State Administrative Court.

The provincial government required employers to give an extra 3.27 to 5 percent monthly salary rise to workers with at least one year employment period in 2022. The Apindo lost the case at the court but it appealed to the Supreme Court, which has not issued a ruling.

For 2023, the extra monthly wage rise is proposed at around 6 percent.

The Apindo said employers weren't involved in any discussion by the provincial government to impose the adjustment.

While a similar decree of last year is being disputed at the Supreme Court, the governor "should respect the rule of law by refraining from issuing another decree with a similar purpose", the Apindo said, adding that the gubernatorial decree is unconstitutional.

"If the governor fails to repeal the decree, employers in West Java will file a lawsuit with the State Administrative Court," it said.

Two West Java districts, Karawang and Bekasi, already reached a new milestone with a minimum monthly salary topping Rp 5 million ($320).

West Java Manpower Department Head Rachmat Taufik Garsadi defended the gubernatorial decree, saying it's meant to increase the bargaining position of labor.

"Workers are typically in a weaker position during [wage] negotiations and it is for that reason that the gubernatorial decree must be issued," Rachmat told Antara news agency.

Source: https://jakartaglobe.id/business/employers-accuse-w-java-governor-of-overstepping-authority-with-latest-wage-adjustmen