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Apr '06

Job security, not law revision, workers say



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Welfare-based job security could be a win-win way of settling the current the industrial conflict between workers and employers and repairing the investment climate in the country.

Clearly, the country’s current social security systems needs to be reformed to provide certainty and humane treatment for dismissed workers, the unemployed and the retired. It also calls for a political commitment to offset the widening remuneration gap and adopting workers’ fundamental or normative rights to the labor law to promote industrial harmony.

The strong opposition (from workers and labor unions) to the proposed bill to revise Law No. 13/2003 has a lot to do with the absence of a humane social security system, fair remuneration system and pro-labor economic policy, all of which would guarantee job security for workers.

Workers and employers have been at odds over the government-proposed bill, which is yet to be submitted to the House of Representatives (DPR) for deliberation, since it fails to accommodate the interests of both sides.

The last two weeks saw waves of labor rallies in major cities and towns on Sumatra and Java, the face of a massive labor union movement that almost disrupted political stability and demanded the government shelve its plan to revise the law.

The workers even threatened to stage a national strike in observance of May Day to attract international attention to the poor labor conditions in the country.

On the other hand, employers have proposed a more radical concept than the government has proposed in the bill. Besides demanding the labor market be liberalized, they also proposed a flexible implementation of contract-based employment and outsourcing and a cut of at least 50 percent of severance and service payments for dismissed and retiring workers.

The Confederation of All-Indonesian Workers Union (KSPSI) and the Confederation of Indonesian Prosperity Labor Union (KSBSI), two largest trade unions in the country, have no objections to the planned revisions as long as the draft law offers a win-win solution to workers and employers.

“What the government and employers have proposed in the draft law is negotiable. The most important things workers need are job security, that their rights are respected during their employment, fair compensation if dismissed and humane treatment at retirement,” KSPSI Deputy Chairman Syukur Sarto told The Jakarta Post on Friday.

He said workers would feel secure in their workplace if a fair remuneration system was adopted and the social security system provided fair compensation for dismissed workers and health and pension benefits for retired workers.

Workers will have no objections to the proposed unilateral dismissal by employers of workers, said Syukur, or the cuts to the severance and service payments for dismissed workers, provided the social security programs, which are run by state-owned PT Jamsostek, give fair compensation to dismissed and retiring workers.

“Employers should enroll all their workers with Jamsostek and both sides can improve the payroll by increasing the basic insurance premium at least to 20 percent from the current 13 percent,” he said.

To provide severance pay for dismissed workers and guarantee life-time healthcare and maximum pension benefits for retiring workers, the government should amend Law No. 3/1992 on social security programs. It should also enforce Law No. 40/2004 on the national security system to provide financial aid to the unemployed.

In terms of social security programs, Indonesia is ranked last in Southeast Asia. There are no life healthcare programs or dismissal benefit funds, and workers receive a pension benefit into which they and their employers have paid just seven percent of their monthly wage during their employment.

Malaysia pays 23 percent of its workers’ monthly salary into the pension program, Singapore 44 percent and Vietnam 23 percent, allowing their retired workers to enjoy security in their old age.

Syukur also said the widening salary gap between the lowest-ranked workers and those in the managerial level had prevented employers and a majority of workers from paying a higher premium on their social security programs.

“The current wage ratio could be 1:150. If the ratio is reduced to, say, 1:50, the lowest-ranked workers could be paid around Rp 3 million monthly, enabling them to pay a higher premium to Jamsostek,” he said, adding the wage ratio in welfare countries such as Japan, France and South Korea was 1:30.

Rekson Silaban, chairman of KSBSI, concurred and said the government should also control price stability through its economic policy to maintain workers’ purchasing power.

“The current remuneration system and the economic policy which supports market liberalization have weakened workers’ purchasing power. The government’s economic decision to increase oil prices twice last year and the soaring prices of basic commodities and transportation tariffs have overburdened a majority of low-paid workers,” he said.

Djimanto, secretary general of the Indonesian Employers’ Association (Apindo), said employers have long proposed a fundamental reform of the social security programs in an effort to repair the investment climate, but the government had been slow to take the initiative.

He said it would be difficult to adopt a better remuneration system because almost 70 percent of the 103 million person work force were unskilled high school drop outs.

“Employers have an interest in improving the quality of human resources. The government and parents have to play their role in improving the education system and to provide training programs to produce ready-for-employment school graduates.

Sumber : (Ridwan Max Sijabat) The Jakarta Post, Jakarta


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