Ridwan Max Sijabat, Jakarta – The business community and labor unions agreed Tuesday to support the government's plan to insure dismissed workers through state-owned insurance firm PT Jamsostek.

Manpower and Transmigration Minister Erman Suparno said earlier Jamsostek would be asked to handle a severance payment program for laid off workers after the government chose to delay revisions to the Labor Law following massive labor protests across the country.

Severance pay is among the most contentious issues in the proposed revision to the law, which has been rejected by labor unions. The proposed draft of the new law also would allow companies to outsource all of their work to other companies and employ expatriate workers in all strategic positions.

Syukur Sarto, deputy chairman of the All-Indonesian Workers Union Confederation, hailed the special program by Jamsostek, saying it would provide certainty for workers.

"The government and employers should understand workers' rights if they want the bill accepted. Labor conditions are very poor. Most workers are paid in line with regional minimum wages. The proposed revisions do not give workers certainty of their rights if they are fired. There is no job security," he said.

Confederation of Indonesian Prosperity Trade Unions chairman Rekson Silaban also praised the plan, and said Indonesia's social security programs for workers were among the worst in Southeast Asia. Rekson said the majority of workers could not enjoy retirement because their pensions were so small and health care was not guaranteed by the social security programs.

Indonesian Employers Association secretary-general Djimanto said his organization had long proposed the idea of setting up a program to help fired workers, but the government was slow to respond to the proposal.

"Employers are able to pay 10 percent of their workers' wages into the special scheme. This will help not only dismissed workers until they get new jobs but also employers, instead of having to pay a maximum of 32 times workers' monthly salaries in severance pay," he said.

He said that besides the financial benefits of the special program through Jamsostek, laid off workers also will receive severance and service payments, which will amount to less than the payment levels set by current labor laws.

Jamsostek director of operations Tjarda Muchtar said the company was ready to deal with the special scheme, which would be separate from its current social security programs to provide financial benefits for fired workers at the cost of their employers.

"Jamsostek has no objections if it is entrusted to carry out the special program, on the condition that it must be separated from our current four social security programs," he said Tuesday.

He said the government should sit down together with employers and labor unions to discuss the financing for the program and issue a regulation on it.

"Jamsostek cannot set the percentage of premium employers should contribute to the special program. That has to be determined by employers and workers or labor unions. The main point is that massive labor dismissals will not disturb employers' cash flow since it will be covered by Jamsostek," he said.