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Layoffs not as severe as reported, but caution needed
Jakarta Post - February 23, 2016
However, they did not deny the presence of work contract termination and warned industry players and the public to remain vigilant about the ongoing slow economic recovery.
The Manpower Ministry has issued preliminary data on laid-off workers in response to the mass layoffs reported earlier by the Confederation of Indonesian Workers' Union (KSPI).
The data, sent to The Jakarta Post on Thursday, shows that as of Feb. 15, there were 1,450 workers whose contracts had been terminated this year. KSPI, on the other hand, has claimed that at least 12,000 workers had stopped working.
Manpower Minister Hanif Dhakiri said he regretted that the union had used questionable data to raise the issue, leading to public unrest and a misperception of the actual situation.
"Their data has to be corrected. The media should also double-check with related companies to avoid stirring up the public," he said. He also challenged the union to come to him directly and provide a copy of their data.
Previously, companies, in sectors ranging from automotive, electronics, mining to banking, that are said to be terminating workers, have also clarified their perspective.
Mitsubishi recently said that it did not terminate workers' contracts but offered early retirement to assemblers amid the declining local demand for commercial cars last year. Of 1,800 workers to whom the offer had been made, 183 have reportedly accepted it.
TV maker Toshiba said that it would terminate the contracts of 360 workers, not 900 as claimed by KSPI, as demand from the Middle East dropped drastically in 2015.
Lamp maker Panasonic also clarified that it would only lay off 425 workers, not 1,600 as was claimed, due to drop in demand for compact fluorescent lamps in the local and Japanese market.
Similarly, the Financial Services Authority (OJK) said that layoffs might hit the banking industry too this year, but far lower than last year, when some 3,700 employees of private lenders Danamon and CIMB Niaga accepted early-retirement offers.
Mining companies, such as Chevron, ConocoPhillips and Star Energy, are also reportedly planning layoffs and delaying recruiting new employees but have so far avoiding stating any specific number.
Economists also believe that the number of layoffs is not as high as what has been spread via social media but have suggested that businesses make more of an effort to adapt to changing market demand to stay competitive in the sluggish economy.
"I believe that layoffs may be present, but they're not as bombastic as what is being claimed by KSPI. However, the number might not be as low as the ministry data, as many small and medium enterprises companies in the regions don't report [employee data]," Latif Adam, an analyst at the Indonesian Institute of Science (LIPI) said recently.
According to the Manpower Law, companies planning to terminate workers must report to the ministry or regional administration to ensure that compensation is paid. "Businesspeople may not want to be responsible for making payments, so they don't report," he added.
Latif said that current layoff happen from a combination of sluggish global economy and inability of businesses to adapt to changing market demand.
Enny Sri Hartati, an economist with the Institute for Development of Economics and Finance (INDEF), said that terminations could persist as long as the global and local economy remained sluggish, so the government needed to ensure that investment in labor-intensive sectors could absorb workers that were being laid off. (rbk)
Source: http://www.thejakartapost.com/news/2016/02/23/layoffs-not-severe-reported-caution-needed.html.
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