A Government that Cares - Fuel Prices and Retrenchments

The Government in recognition of the added pressures that the recent jacking up of fuel prices is going to have on businesses and their ability to keep their current employees employed, the Government through the Minister of Labor and Transmigration has issued Circular No. SE.197/MEN/PHI-PPHI/V/2008.

The Circular has been issued to encourage Governors, Regents, and Mayors to use their influence within their respective spheres of government to reduce the incidences of dismissal or retrenchment. It is clear that the reducing of fuel subsidies mean that it is going to cost employees more to get to work. However, the increased costs of fuel mean that the cost of running a business is also going to increase.

Therefore, the Minister hopes that businesses can focus on improving efficiency and reduce overheads, explore means of increasing food and transport allowances for employees, and open bipartite dialogue with unions to determine mutually beneficial ways forward in an environment with increasing fuel costs.

In the event that employers cannot avoid reductions to their workforce then any retrenchment or dismissals must be in accordance with the prevailing laws and regulations.

The Circular is current as of 26 May 2008.