Indonesia won't scrap labour bill...for now

Indonesia's labour bill needs fixing - president
Sat Apr 8, 2006 3:33 PM IST

JAKARTA (Reuters) - The Indonesian government will reformulate plans to revise a labour bill that has pitted employers against unions, President Susilo Bambang Yudhoyono said on Saturday after protests across the country in recent days.

Employers have complained that Indonesia's 2003 labour bill gave workers so many benefits and so much freedom to organise and strike that it dealt a blow to the country's economic competitiveness and its attractiveness to investors.

The government and current parliament, elected in 2004, have plans to amend the bill to give employers more flexibility, curb strikes and soften regulations on severance payment for dismissed workers.

"We will not push forward the draft to revise (the bill) to the parliament. We will fix and reformulate it," Yudhoyono told reporters in a news conference, adding any revision would come from a forum of employers and unions.

"In the coming days and weeks, we will have intensive discussions...to formulate what is best for our country," said Indonesia's first popularly elected president, adding independent groups and universities should also be involved in the debate.

Tens of thousands of Indonesians rallied across the world's fourth most populous country on Wednesday to protest against revising the employment laws.

On Friday, Yudhoyono met union leaders who argue the revisions ignore the plight of workers and have vowed to keep protesting to ensure the law goes unchanged.

The 2003 bill was a product of the country's first democratic parliament after the 1998 fall of autocratic President Suharto, who had kept unions on a tight leash, but the business community says the new law went too far the other way.