Plan For Revisions of Workers’ Guarantee Law
Friday, 05 January, 2007 | 13:28 WIB

TEMPO Interactive, Jakarta: Worker circles support the government's plan of revising the payment system of severance pay that entrepreneurs offer to the insurance system of Workers’ Guarantee (Jamsostek). The support is given as long as the amount of payment does not alter. Head of the Union Confederation for Prosperous Indonesian Workers Rekson Silaban said he hoped that the plan can be attached in the revisions of Jamsostek Law.

According to Rekson, with the severance pay guarantee, Jamsostek premium that entrepreneurs pay must be increased. Today, entrepreneurs only pay the premium at approximately 11.7 percent of the workers' salary. It is already 22 percent in Vietnam, for instance. “So, if it's possible, 20 percent must be added,” said Rekson after meeting with Vice President Jusuf Kalla at the Vice Presidential office yesterday (01/04) in Jakarta.

In the meeting, said Rekson, Jusuf Kalla said that the obligation to pay the severance pay becomes one of the causes of the investment plunge in Indonesia. In fact, in 2002, Indonesia was at fourth position as regards Japan's investment destination. However, two years ago, it was only at ninth position. Costs for paying severance pay in Indonesia is the fourth most expensive in the world.

The high severance pay also has a negative impact on workers. Entrepreneurs cannot meet their obligation by virtue of bankruptcy. Since the Law on Workers was stipulated, it was estimated that 120 thousand workers did not receive severance pay such as those of PT Texmaco, PT Dirgantara Indonesia and a shoe factory in Banten.

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