Govt to audit 35 firms seeking wage rise suspension

The Jakarta Post, ,  Surabaya   |  Fri, 01/09/2009 10:55 AM  |  East Java

The East Java administration will send an independent team to audit 35 companies seeking a suspension of the hike in the minimum wage that takes effect this month, an official said Monday.

"The team representing the government and labor unions will check on the companies' financial conditions," Indra Wiragana, head of the East Java Labor and Population Agency, told The Jakarta Post.

Companies experiencing financial difficulties, he added, would be exempted from the governor's decree on minimum wages.

He also said the administration would allow troubled companies not to raise wages in accordance with the decree, to avoid layoffs that could worsen the unemployment problem in the province.

Acting on proposals from regional administrations, acting Governor Setia Purwaka issued a decree on Nov. 21, 2008, to raise by up to 30 percent the minimum wage in the province's 38 municipalities and regencies in 2009.

Indra declined to identify the 35 companies, which include several hard-hit by the global economic downturn.

I Made Sudjana, secretary of the provincial office of the Indonesian Employers Association (Apindo), defended the troubled companies, saying what they did was in line with the law.

"The independent auditor's findings will be discussed by the provincial wage board without interference from either the government or labor unions," he said.

However, Jamaluddin, coordinator of the Alliance for Labor Defenders (ABM), called on the audit team to publicize their findings to ensure transparency.

"We are suspicious of certain employers using the economic crisis as an excuse to avoid raising their workers' minimum wages," he said.

He added the ABM also opposed two-way negotiations to set wage levels on the basis of the joint ministerial decree on the wage hike, and instead sought a hike in accordance with the 2008 inflation rate.

"We have identified five companies in Surabaya and Gresik that have no financial problems but are seeking two-way negotiations to set wages in accordance with the joint ministerial decree."

Data from the provincial manpower and population office shows five of nine garment, shoe, plywood and paper factories in Pasuruan, Nganjuk, Sidoarjo and Probolinggo have dismissed a total of 1,983 low-ranking workers and 125 others because of falling orders for the next three months. (sal)

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