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Home >IndonesiaEconomy, tax incentives & labor conditionsA blue-collar worker earns on average a wage of 222 euros gross per month in this country in 2008.
The police have a long history of intervening in workers’ demonstrations and strikes at the behest of employers. Violence is not unusual. Labour activist, Dita Sari, says they are often supported by militias or thugs who are hired by the employers.
Frequently, when workers try to set up trade unions, companies either terminate their employment or demote union leaders and members, making workers afraid to organise or join a union. Some unions claim that strike leaders were singled out for lay-offs when companies downsized their workforce. Trade unionists also cite a number of attacks on their organisers by paramilitary groups, supported by the military and police and paid for by employers, to intimidate workers or break strikes. Such retribution against unionists has not been prevented or remedied effectively.
Despite the fact that the labour laws still apply in the country’s seven Export processing zones, there is generally stronger anti-union sentiment in the zones. Muhammad Lufti, the Chairman of the government’s Investment Coordinating Board of the Export processing zones, publicly stated "potential investors are very concerned about the union issue, and the huge cost of paying compensation to dismissed workers. We are now exploring the possibility of relaxing the implementation of the labour legislation in the SEZs."
In order to reduce labour costs and eliminating unions, companies typically declare bankruptcy in order to avoid paying the significant severance payments provided for under law, close the factory for several days, and then rehire workers as contract labour at a lower cost. Leaders and activists in the union are usually not re-hired. Employers have done so with the apparent approval of both Provincial and Central Committees for the Settlement of Labour Disputes.
Minimum wage noted (US$/day)
2005 2 US$/day at/for The Gap Inc. |
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