Achmad Faisal and Agnes S. Jayakarna, THE JAKARTA POST, SURABAYA | Wed, 10/14/2009 1:34 PM
The East Java administration will appeal to the Supreme Court after the provincial high court overruled a governor's decree on minimum wages for cities and regencies for 2009.
Governor Soekarwo said the high court's verdict was not legally binding, thus companies operating in the province still had to use the disputed 2008 governor's decree on the wage as their reference for paying employees.
"We'll ask all mayors and regents to take the necessary steps to ensure the decree is enforced," Soekarwo said Tuesday.
The high court verdict has raised concerns among workers at household appliance producer PT Maspion, with the company reportedly set to cut the salaries of its 230,000 workers in Surabaya, Gresik and Sidoarjo.
This was done to keep the minimum wage in line with figures recommended by local manpower agencies, which are far lower than the figure stipulated in the gubernatorial decree.
Maspion PR head Suharto, however, denied the accusation.
"There's no such move afoot to cut the wage," he said. "We're still waiting for the final court decision."
The dispute began when the Indonesian Employers Association's (Apindo) East Java branch took legal action against a move by some mayors and regents in the province to change the minimum wage previously agreed upon by manpower agencies, to bring it closer to the approximate living costs index derived from a survey.
The acting governor at the time, Setia Purwaka, used the change recommended by the mayors and regents as a basis to decide the 2009 wage, which was higher than that proposed by the manpower agencies.
Setia's decree was deemed disadvantageous to the business community because this year's minimum wage of Rp 948,000 per month was increased by 17 percent from the 2008 wage, while at the same time most companies were experiencing financial difficulties due to the global crisis.
In a further development, Soekarwo also instructed all mayors and regents in the province to submit their 2010 minimum wage proposals by Oct. 16 at the latest, or risk the governor deciding on a figure without taking into consideration their recommendations.
"We have to take the risk," he said, adding he would announce the 2010 minimum wage by mid-November.
Surabaya, Sidoarjo, Pasuruan, Batu, Mojokerto and Gresik have yet to submit their recommendations for the 2010 minimum wage to the governor.
Soekarwo expressed hope all the tripartite manpower agencies at municipal and regency level could agree on a minimum wage figure that was adequate to meet the needs of all parties concerned.
