Jakarta – When a labour scout visited 18-year-old Siti Mariam's Indonesian village offering her a job as a factory worker on the outskirts of Jakarta, she thought her prayers had been answered.
But three months after her family had mortgaged their rice fields in West Java's Serang to foot the 800,000 rupiah (91 dollars) recruitment fee, Mariam found herself penniless and stranded after the factory sacked her for demanding the legal minimum wage. "All I want to do now is get another job, so I can help my family, because theyre very poor," she told AFP.
Workers like Mariam argue that a proposed amendment to Indonesia's three-year-old labour law would make it even easier for employers to dismiss workers unfairly and without adequate compensation.
Up to 50,000 are expected to march in the capital on Monday to protest the law as they mark May Day, with some 21,000 police preparing to be deployed to ensure calm.
Protests by thousands of workers earlier this year led to the shelving of the revisions, which would end a requirement for employers to provide two months pay for every year an employee had worked if they are sacked.
President Susilo Bambang Yudhoyono has promised to hold tripartite talks between government, business and unions to draw up a compromise.
Big business however argues that jobs will continue to evaporate if the law is not revised so that workers can be hired more easily on flexible contracts.
They argue that Indonesian workers are overpaid and under-skilled and the original three-year-old law, hailed for being progressive, makes it difficult for companies to turn a profit.
"Since the economic crisis, I don't see any new companies coming," said Sofyan Wanandi, chairman of Indonesias Employer Association.
In the 1990s, Indonesia was a major exporter of textiles, shoes, garments, and electrical goods, and the authoritarian government of Suharto kept a tight leash on unions.
But a messy transition to democracy over the past eight years, coupled with rampant corruption and an uncertain legal environment, has made Indonesia one of the least competitive countries in the region, economists say.
"Labour costs have gone up, productivity hasnt gone up, distribution costs have gone up and the rupiah has become stronger," says David Chang, director of research at UOB Kay Hian Securities.
"If Indonesia does not change its labour laws we will continue to have high unemployment, foreign companies will be reluctant to invest in Indonesia because there too much risk in hiring people," said Chang.
Official unemployment in Indonesia, with a population of some 220 million, is at 10.8 percent, a huge jump from its 4.7 percent at the start of the Asian economic crisis in 1997.
The Association's Wanandi said that Indonesia desperately needs more investment to reduce unemployment but said the 2003 law has already made many companies reluctant to hire workers on permanent contracts. "Its impossible to sack people. Even if they do criminal things, we still have to pay compensation," Wanandi complained.
But for workers like Mariam, employers already have too much flexibility. The snack food factory where she was employed in Tangerang, on the outskirts of Jakarta, paid her just 20 dollars a month for the three months she worked there. She was dismissed when she sought the minimum wage of 69 dollars. And the labour agent who promised at least a years work disappeared.
"Of course I will march (on Monday) to demand the government rejects the labour revision because the revision values companies over workers," she said.
Bagus Musharyo, from the Social Institute for Labour, a non-government group assisting factory workers, says unscrupulous agents bring thousands of vulnerable young girls like Mariam to work in Jakarta and its surrounds. While workers can take such employers to the Labour Department for dispute resolution, the process can take months, if not years, Musharyo said.
And many companies prefer informal dispute resolution: the use of hired thugs to intimidate workers into accepting their dismissal or unfair conditions, he added.
Charles David, secretary-general of the Confederation of All Indonesian Trade Unions, said it is not labour costs which make Indonesia an unattractive investment location, but corruption.
"Labour costs are around 10 percent, production costs 65 percent and 'invisible' costs 20-25 percent," said David. "If companies fought against invisible costs, they wouldnt worry about labour costs so much."