Workers use pensions for Idul Fitri

Ridwan Max Sijabat ,  The Jakarta Post ,  Sidoarjo   |  Fri, 09/26/2008 11:01 AM  |  East Java

While waiting for the delayed payment of past-due salaries, Idul Fitri bonuses and severance pay, thousands of Muslims who work for a garment factory are withdrawing their pension funds from state-owned PT Jamsostek.

Workers at PT Artha Glory Buana, which unilaterally declared bankruptcy, plan to use the funds to celebrate the Idul Fitri holidays beginning on Oct. 1.

Hundreds of workers who had contributed to the pension program for five years or more were still standing in line Thursday evening with membership documents in hand at Jamsostek's branch office in Sidoarjo.

Sidoarjo regent Win Hendrarso had symbolically handed over pension funds to five affected workers at his office here on Wednesday. The five received between Rp 4.3 million (US$462) and Rp 5.5 million depending on their salary levels and contributions.

Local representatives from Jamsostek's East Java regional office, the government's manpower agency, and police attended the ceremony.

The pension funds were made available after the regent appealed to Jamsostek to help the workers celebrate the holidays while the government and the garment factory's management continued to lock horns over the latter's obligations after recent massive lay-offs due to the company's financial problems.

The 1992 law governing social security programs stipulates Jamsostek will pay the pension benefits to workers turning 55, the retirement age, but a 2006 ministerial decree allows dismissed workers to withdraw the pension funds if they remain unemployed for six months after their dismissal.

The head of Jamsostek's Sidoarjo branch office, Elias Manuhutu, said his company had decided to allow the premature turnover of Rp 7 billion in workers' pension funds so they would have something in hand going into the traditionally peak period for consumer spending.

"According to the decree, the workers would not have been able to access their pension funds until February 2008, six months after their dismissal. But, thanks to the regent's intercession, the workers are at my office to take their funds as we speak," he told The Jakarta Post by phone.

He said a large portion of the more than 1,800 employees registered with Jamsostek would be allowed to take the pension funds whereas a small portion, those contributing for less than five years, were not eligible. Most recipients received about Rp 2 million because their salaries were in line with the provincial minimum wage and they had been participating in the pension program for five to seven years.

Maisaroh, 36, who received Rp 5.5 million for her 15 years of contributions, appreciated Jamsostek's commitment to protecting the workers, saying she would spend only a small part of the money to celebrate Idul Fitri and use a bigger part to finance her children's education.

She said workers would insist on bringing their industrial disputes to the labor court if current negotiations with company management remained deadlocked.

She said she had yet to receive severance or the delayed payment of four months of salary totaling Rp 3.5 million.

Chair of the National Workers Union unit at the company, Hakam, said the employees would take their case to the court which handles industrial labor disputes since the management was showing no good will toward settling matters through bipartite dialogue.

"Management still has to come up with at least Rp 36 billion to fully compensate the dismissed workers for suspended wages, Idul Fitri bonuses and severance payments," he said.

The company's management has offered instead to pay out Rp 10 billion for the suspended payment of the workers' final four months of wages, severance pay and Idul Fitri bonus.

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