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Workers `safe' until elections
Most businesses may wait until after elections before deciding whether to lay off workers permanently, to minimize potential social unrest
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Most businesses may wait until after elections before deciding whether to lay off workers permanently, to minimize potential social unrest.
The Indonesian Employers Association (Apindo) said steps should be taken to help avoid economic and political crises reminiscent of the previous turmoil in the late 1990s.
"We will try our best not to lay off employees, but it seems it is inevitable during this time of crisis. Weakening orders forced some firms to reduce their shift hours and working time," Apindo chairman Sofjan Wanandi said during a seminar on Tuesday in Jakarta anticipating this year's potential for massive layoffs.
"Companies will start to temporarily dismiss permanent employees in April during the general election, and then we will see the economic situation after the election. If things do not get any better, then there will be layoffs, unfortunately," he added.
During temporary dismissals, employees will still receive their basic monthly salaries and may be summoned back to work.
Permanent employees in general are still safe and companies are still focusing to cut their expenses by terminating the contracts of contractual and freelance employees, up until now.
Apindo data showed in Jakarta alone, around 4,000 employees had been laid off in December and about 6,000 workers would follow by the end of January.
On a national scale, as much as 27,578 workers were laid off from last September to Jan. 23. and almost 25,000 will follow soon, according to Andi Syahrul from the Manpower and Transmigration Ministry.
Most of the laid off workers were contractual and freelancer working in the automotive, electronics and garment sectors.
Sofjan said the measures to delay lay offs of permanent employees was taken to avoid a convergence of economic and political crises, like what happened in 1998.
"The 1998 national crisis was an example of how devastating it could be if an economic crisis clashed with a political crisis. We do not want that to happen again, " he said.
In the aftermath of the 1998 national crisis, the country needed a long and painful decade to slowly recover from the economic and political ruins, marred by rapid turnover in national leadership.
"Leadership changes also mean new regulations that we will have to adapt to. Not to mention potential conflicts caused by disatisfied losing candidates, which will not be good for business," head of Apindo Jakarta Provincial Board Soeprayitno said.
Meanwhile, state occupational insurance company PT Jamsostek said it has raised the rate of subsidy from last year's Rp 2 billion (US$173,000) to Rp 5 billion for laid-off workers as the impact of the crisis would peak at home in mid 2009.
"The laid-off subsidy is Rp 350,000 for each person. The planned budget for the subsidy originally was at Rp 50 billion but after a share holders' meeting, it is decided to be Rp 5 billion," Jamsostek CEO Hotbonar Sinaga said.
Only laid off workers with less than five years of working experience are eligible to receive the laid-off subsidy and they can only apply for the subsidy once in their life.
Workers with more than five years of experience can cash in for their post-employment benefits (JHT) as usual. (hdt)
