Monday, 18 July 2016


Indonesia’s worsening economy had been followed by mass dismissal of workers. Tens of thousands of workers lost their Jobs in the past seven month. Businesspeople put the blame on adverse economic condition and the Ministry of Labor confirmed it.

In view of the condition the Ministry of Labor asked businesspeople and workers to unite and enhance efficiency. Sahat Sunurat, Director of Workers Dispute stated on Friday (2/10) that employers and workers must sit together to find solutions.

According to Sahat, the key solution was not the Government but with the said two parties. The efficiency to be attained by The company was among others to cut employees’ work and working days so production cost would be reduced.

The same was expressed by Ekson Silaban, Director of Labor Institute Indonesia, who said that axing of works hours was a smart solution to sustain company’s financial resilience in hard times.

Beside the above scenario, he also recommended execution of Minimum Wages until next year. Ekson said that the Government must support the scenario so that the Government must support the scenario so the businessworld could survive. In the Circular Letter of the Ministry of Labor No. 90/2004 on Prevention of mass dismissals, the Government could reduce salary of the middle and top management executives. Beside reducing wages and fringe benefits the circular letter also proposed reduction of working days, limitation of overtime, reducing work hours, to increase homestay, to pay pension, and not to extend contracts.

To quota Apindo’s data, through September 2015 there had been 27,000 cases of dismissals which was due to various reasons among others weakening of Rupiah value against USD, and national economic slowdown. Data of the Social Insurance Board (BPJS) had it there were more than 724,000 people who liquidated their pension fund through January-September 2015. Of that number, 210 workers liquidated their retirement fund in September 2015. Some workers lost their jobs because the company was no longer operating, and some liquidated their pension fund because they resigned.

Many circles suspected there were large scale dismissals done by small industries but they were not reported. The real figure could be much bigger than the data submitted to the Government because the official data was only obtained from companies or Labor Unions reporting to the Ministry of Labor.

Meanwhile of the problem could be solved peacefully between employers and employees, dismissals was not necessary. Cases of dismissals mostly happened in labor intensive industry like mining, textile, footwear, coal mines, oil and gas. The Government was asked to take sound measures to troubleshoot problems. (SS) 

Business News - October 7, 2015

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