Jakarta – Labor unions are threatening massive strikes following Minister of Manpower and Transmigration Al-Hilal Hamdi's decision to amend controversial Ministerial Decree No. 150/2000 on employment termination which allows employees to receive a substantial payout regardless of whether they resign or are dismissed. Labor unions charge that the government buckled under pressure from foreign investors and big businesses.
The amendment, issued on Friday, annuls the requirement to provide severance and service payment to workers who either resign or are fired for committing major violations.
According to Tianggur Sinaga, spokeswoman for the Ministry of Manpower and Transmigration, these workers would only receive compensation money.
"Workers who wish to resign are obliged to lodge a written notice 30 days beforehand," she told The Jakarta Post by telephone here on Saturday. She added that the new decree also allowed employers to limit the number of resigning workers within a certain period.
The previous decree stipulated that compensation consists of the basic annual leave, along with financial support for transport, health and housing facilities.
Workers who leave a company for reasons other than resignation, retirement or dismissal due to a major violation retain their right to receive severance and service payments along with compensation money.
Regarding the severance payment, workers employed less than a year will receive the equivalent of a month's salary, those employed between one and two years receive 200 percent of their salary, between two and three years get 300 percent and so on. The highest severance pay is 700 percent for those who have worked for six years or more.
Concerning service payment, workers employed between three to six years get 200 percent of their monthly wage, between six to nine years receive 300 percent of their wage, between nine to 12 years get 400 percent. The most that can be received is 1,000 percent of their wage for those who have worked 24 years or more.
According to Tianggur, employers are not obliged to provide severance and service payments for retiring workers who are in a pension fund. "If retirees are not in any pension fund, they can receive 200 percent in severance pay, 100 percent in service payment and 100 percent in compensation money," she said.
The amendment also stipulates that workers who do not turn up for work for five consecutive days to participate in an illegal strike will be considered absent without permission. "This ruling wants workers to comply with the official procedure when they are going to go to strike, and those violating it can have sanctions imposed on them by the management," said Tianggur.
She said that according to the law, workers have a right to stage a strike to fight for their interests, but they are obliged to undergo bipartite or tripartite negotiations with the management and/or government mediators before striking. "And workers are obliged to inform their employers and security authorities, including the police, if they want to go to strike," she said.
Tianggur claimed that the substance of the amendment had been discussed with labor unions, businessmen, local non-governmental organizations and foreign investors.
Reactions
When the initial ministerial decree was issued in 2000 by then minister Bomer Pasaribu, employers and foreign investors were up in arms. Over the past week it was labor unions who charged that the government had acquiesced and was victimizing workers to serve the interests of foreign investors.
The All-Indonesia Workers Union Federation (FSPSI) warned that it would mobilize its 11 million members to stage industrial strikes and rallies until the amendment was revoked.
"We have established strong coordination with our sectoral unions to deploy their members to stage strikes in their workplaces. It is impossible for us to accept such a decree which is a serious betrayal of our right to protection," Jacob Nua Wea, chairman of FSPSI, told the Post on Sunday.
He warned that the situation would worsen and the government would lose public confidence if the minister refused to repeal the amendment. "The issuance of the new decree has raised a new problem that will certainly worsen the mounting conflict between the government and the House of Representatives," he said.
Muchtar Pakpahan, chairman of the Indonesian Prosperity Trade Union (SBSI) concurred and said the amendment was evidence that the government was not committed to improving labor conditions in the country. "Workers in East Java, especially in industrial bonded zones in the province, will come to Jakarta to ask for President Abdurrahman Wahid's accountability regarding the decree," Muchtar said.
Ariest Merdeka Sirait, deputy chairman of the Confederation of Independent Labor Unions (GSBI), regretted the amendment, which he said exhibited the government's weak bargaining power vis-a-vis foreign investors. "The amendment implicitly shows that the government is bowing to pressure from foreign investors, and labor conditions will remain poor in the future," he said.
Not surprisingly, Djimanto, deputy secretary of the Indonesian Employers Association (Apindo), hailed the amendment as a win-win solution. "It is unfair and burdensome to employers if they are obliged to provide severance and service payments and compensation money for resigning or retired workers and to those dismissed for major wrongdoings," he said.
He noted that even under the amendment, employers could not dismiss their workers arbitrarily. "Employers are also obliged to pay money to retiring workers whose pension funds are less than the severance and service payment level," he said.