Government Focuses on Worker Demands

Indonesian Version

 
Jasmine Abdurrachim, Ady Thea
 
The huge labor demonstration of 1 September 2015 thrust several pressing issues firmly into the spotlight, and the government has admitted that these concerns need to be urgently dealt with in order to meet the basic needs of the people and the national economy as a whole. One of the issues highlighted was Government Regulation No. 46 of 2015, which relates to the national Pension Plan (“JHT”).
 
Indonesia’s Employment Minister, M. Hanif Dhakiri, has confirmed that the regulation in question has now been revised through the issuance of Government Regulation No. 60 of 2015 and that the revision was the one expected by the labor movement. Their demand was that employees and workers should be able to liquidate their Pension Plans when they either resign or are laid off. Referring to Government Regulation No. 45 of 2015 on the Pension Plan, Mr. Dhakiri added that the government hoped to avert the financial crises suffered by other countries due to the mismanagement of their public-pension systems.
 
Another issue raised at the recent demonstrations was that of minimum-wage policy, as regulated by Presidential Instruction (“Inpres”) No. 9 of 2013on the Determination of Minimum-Wage Policy in the Context of Business Continuity and Worker Welfare Improvement.
 
Minister Dhakiri commented that the minimum wage functions as a social safety net that should prevent people from falling into poverty. Payment of the minimum-wage however should also be within the capabilities of micro-industries, according to Minister Dhakiri.
 
The Presidential Instruction does not mandate a blanket minimum-wage hike though, and instead only applies to certain labor-intensive industries. The aim being to maintain the sustainability of such industries.
 
Concerning to the possibility of mass layoffs, Minister Dhakiri asserted that such layoffs may indeed occur, due to slow growth within the economy having a knock on effect in the employment sector. However, the minister reminded businesses that layoffs should be a final resort. The current economic problems are partly a result of a global slowdown and do not rest solely on the shoulders of Ministry of Employment.
 
Nevertheless, the ministry has formulated several programs designed to deal with layoffs. These include the development of a productive labor-intensive program, as well as other social-protection programs.
 
“When it comes to layoffs, well they are a manifestation of a greater underlying economic problem. Moreover, policies implemented by the government do not solely involve the Employment Ministry, but also other related bodies, as we try to speed up the flow of investment into the country in order to kick-start development. With developments up and running, the economy will start to move and work opportunities will be created,” stated Mr. Dhakiri in Jakarta on 31 August 2015.

Subianto, General Secretary of the Confederation of the All Indonesian Workers' Union (“KSPSI”) claims that 10,000 of his members have already been laid off, and that most of these employees were working in the labor-intensive industrial sector, producing such products as shoes and ceramics. Subianto has penned a circular which he has sent to all KSPSI members, with the aim of formulating a plan intended to prevent layoffs.
 
Possible measures could include a reduction in working hours, the elimination of overtime and the combining of shifts. A reduction in employee benefits could also be an option, just so long as such a move does not interfere employee welfare. Such a reduction could encompass transportation allowances and similar employee benefits.
 
“In the case of all possible efficiency measures being implemented and layoffs still proving unavoidable, then the workers’ union and the business owner in question must discuss the issue of severance pay, with the minimum due being in accordance with the Employment Law,” concluded Subianto.

(sp)