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13 trade unions threaten demonstration against draft bill

Tempo Interactive - September 27, 2007

Ninin Damayanti/Sutarto, Jakarta – As many as 13 trade unions have sent letters rejecting the Government Draft Bill on Severance Pay being passed, to President Susilo Bambang Yudhoyono, Vice President Jusuf Kalla and Manpower Minister Erman Soeparno.

The trade unions include the All-Indonesia Workers Union Confederation (KSPSI); the Indonesian Workers Union Committee (KSPI); the Metal, Electronics and Machinery Workers Trade Union Federation; Cigarette, Food and Beverage Labor Union, Indonesian Muslim Trade Union and the State-Owned Enterprises Trade Union.

"These letters emphasize our rejection of the Severance Pay Draft Bill. We're ready to take action if the draft bill is still passed," said KSPSI Chairman, Sjukur Sarto.

In the Severance Pay Draft Bill it states that the workers who have the right to obtain severance pay through guarantee organizations are those who have wages below five times the Non-taxed Income (PTKP) of Rp5.5 million. As regards the amount that a company must pay this is three percent of the worker's wages per month.

According to Sjukur, the policy to limit PTKP to five times is different from the mandate of the Manpower Decree no. 13/2003. In the decree, the concept is minimal protection, not maximum as in the Severance Pay Bill. Workers and labors unions also viewed the amount of three percent as insufficient for workers' severance pay.

In connection with third parties which will manage the company's reserved funds as the severance pay compensation, said Sjukur, workers and labor unions prefer a multi-provider.

Minister Erman Soeparno once mentioned PT Jamsostek, Dana Pensiun and Jiwasraya as the parties competent to manage the funds.

Workers and labor circles also regretted the government's closed attitude, refusing to announce the draft's final contents before it is issued.

Vice President Jusuf Kalla is of the opinion that the rejection was only a misunderstanding. Therefore the government still continues the plan to pass the Severance Pay Draft Bill. However, the Severance Pay Draft Bill will be discussed again with entrepreneurs and workers.