FPBI against Forced Retrenchment by Arnott’s Indonesia (Inc)
Arnott’s Indonesia is a wholly owned subsidiary of US food and beverage multinational, Campbell Soup Company built in 1869. Located in Bekasi City, West Java, This company produces snacks such as Goodtimes, Tim Tam, Nyam-Nyam, Sticko, Venesia, Presites, and Pirouette. Arnott’s Indonesia also produce not only for the domestic market. The company export its snack products such Royal Dansk to 32 countries
The company is among of the leaders in the food sector. In 1991 the company was using Bukit Manikam Sakti (BMS) as its name. It produced some products such Nyam Nyam, Slamet, and Goodtime. During 1997-1998, the company changed its name to Helios. Eventually in 2000, the company officially changed as Arnott’s Indonesia. Currently, Arnott’s Indonesia employs 1200 workers, among them 500-600 workers are contractual.
Chronologies of Retrenchment Case
On May 3, 2018 the unions at PT Arnots Indonesia, Indonesian Labor Struggle Federation (Federasi Perjuangan Buruh Indonesia/ FPBI) along with FPBI, SPMAI, and KSPSI, received an invitation from the management to attend a meeting on May 4 was invited by the Arnott’s Indonesia management to attend meeting on Friday, 4th May 2018 in Fave Hotel, Central Jakarta.
There was no explanation about agenda of the meeting. At the time of the meeting,
The management told the unions that the company is downsizing its workers because of declining in sales. They claimed that the progress has been decreased since 2014. Given the situation, the management asked workers to take a long-term Ramadhan holiday, starting from 11st May to 28th May 2018.
The result of the efficiency measures is a dismissal of workers. At the end of the meeting, the management asked the unions to sign the meeting notes. FPBI, affiliates of KPBI, rejected the downsizing plan and refused to sign the meeting notes since the meeting was more to a briefing forum rather than a bipartite negotiation meeting.
Monday, 7th May 2018: The management explained about an internal condition, especially sales department. They also told about production department. According to them, the company needs to increase employees in the production department, because there is not enough capacity in the department of production to employ the current number of workers. The trade union made their cases against the claim made by the management, but still, the management still stands with their argument.
According to them, the company will give 2 times of compensation according to the regulation under the ministry of manpower (consist of severance, long service and substitution payment) + 1-month separation payment. But SPSI asked to increase the number of separation payment. Then, the management agreed to increase it in according to the demand. So, the management offered 2 times of compensation + 2 months separation payment. FPBI on this matter disagree about the offering. FPBI also did not want to sign the bipartite agreement.
Tuesday, 8th May 2018: The management announced voluntary resignation for the permanent workers. The post says that for the workers who voluntary resign from the company, the management provides severance as much as 2 times the requirement by the ministry of manpower plus 3-month wages. The company set three batches to “the voluntary resignation”. The first period is May 8-15; second period May 16-21; and for the third period, the company will name the workers to “voluntarily resign”.
On May 23, 2018, the company prevented the union officials from FPBI to enter the factory. The unions responded to it by launching a spontaneous demonstration, forming a picket line in front of the factory.
Declining in sales is only a cover to sack workers. FPBI found the downsizing due to declining in sales contradicts with the memo posted by the management announcing that the company will recruit 200 people after Eid in August 2018. The memo also says that the company will install the new machine and the production is running as usual to meet the export target. FPBI concluded that the downsizing is only a cover to sack the workers. To date, about 300 workers have been fired, including the leaders of the unions.
Mass retrenchment is a crime against humanity
There are currently millions of people in the labor force looking for jobs in a very crowded job market with narrow opportunities. Of course, workers aspire to a decent work to ensure sustainability of life for themselves and their family. The Indonesian Labor Law basically contains a substance to make flexible the labor regime with the aim to be able to meet the needs of the capitalist to sustain capital accumulation. It is often referred to as ‘labor market flexibility’
In this capitalistic economic system, every industrial relations problem such as employment is constituted under the market mechanism of bargaining between the capital owner and the worker. The state in this regard acting as a legislator, while the wrong and the truth will be determined subsequently by the court. This means that such a State has no power to crack down on any violation of labor normative rights, and the courts will depend on the subjective judicial views and decisions.
The handling of law enforcement by and the settlement of labor dispute from the state to market mechanism is the main cause of continuous violation of the workers’ rights. Yet again the workers always become the victim of any such disputes. The presence of the State as the society’s servant should be the key to secure work and life for the workers in particular and society in general. But when the State is absent in the middle of a situation where the supply of labor is abundant, along with the competition between workers, will always be a golden opportunity for any company to undermine the workers’ rights.
The impact of flexible employment sector added with the absence of the State ultimately make retrenchment a very easy thing to do by the company, as well as the employment agreement in accordance with the wishes of the owner, or the company regulations in accordance with the will of the company. In short, the presence of a flexible labor market, a law that does not regulate and impose strict sanctions. The state that does not take firm action and does not guarantee the protection of its citizen will ultimately always have an adverse effect on every working people. Workers will forever be the victims.
In Bekasi, in Arnott s Indonesia case, the company is trying to retrench workers by PDS or voluntary resignation mechanism. However, the term ‘voluntary’ is being used only to cover the retrenchment because there are indications of coercion done by the company. The term voluntary in reality is a coercion. The company argues that a decline in production became the reason for management to retrench workers. A total of 300 employees were forced to ‘voluntary resign’ with an offer of severance pay.
The company paid back workers’ dedication by dismissing them. The workers would get nothing for the coming ‘Idul Fitr’ of Muslim’s glorious day. Workers are not appreciated, easily disposed for the sake of abundant profits over the years of hard working.In the Indonesian Labor Law, the resignation terms are stipulated as following: 1. Management may terminate the employment of workers due to entering retirement age (Article 167 Paragraph 1 of Act 13 of 2003).2. Indonesian Labor Law does not stipulate the retirement age limit, however it is then stipulated in Government Regulation Act 45 of 2015 on Pension Program. According to the regulation in Article 15:
- Paragraph (1) states that for the the retirement age is 56 (fifty six) years.
- Paragraph (2) from 1 January 2019 the retirement age as referred to in paragraph (1) shall be 57 (fifty seven) years.
According to the law, the workers entitled to get a pension and the employer is obligated to give compensation for a retirement. Both the Labor Law and the Government Regulation does not recognize Voluntary Resignation terms at the request of the company except if it based on a request of the worker themselves. This means that if the voluntary resignation done before the age of retirement is basically null and void, given the refusal of the workers. In other words voluntary resignation will be categorized as one-sided retrenchment.
Voluntary resignation is nothing but mass retrenchment that will bring the worker of Arnott’s Indonesia into the abyss of suffering for themselves and for their families. The future economic situation will ultimately become a burden for workers to socialize in the midst of society. The situation will obviously different between those who are still working with those who are laid off or not working. The consequences will continue as long as the state does not defend and protect workers’ rights.
We from Indonesian Labor Struggle Federation (FPBI) branch in Bekasi are against the voluntary resignation imposed by Arnott’s Indonesia management. We demand the management to re-employ the workers back to their original position. The dismissal is illegal given that the company is in good shape, and the action is basically an effort to eradicating and suppress trade unions. We also call for a full support to the entire family of the Indonesian Labor Struggle Federation wherever they are located and to the entire movement of the people to stand against the arbitrariness. The forced retrenchment through voluntary resignation is a crime against humanity that must be countered by the entire labor movement as well as the popular movement.
Agusto. Chairman of FPBI Bekasi branch, Chairman of FPBI Arnotts Union.
Ian Ahong, Media and Propaganda Department of KPBI